The Chancellor of the Exchequer Jeremy Hunt made his Autumn statement on the 17 November 2022.
It was predicted to bring in a tax bill increase for many income taxpayers to help reduce debt and protect vital public services like the NHS.
This prediction was correct and we detail some of the changes that will come into effect from the 2023/2024 tax year which starts on 6 April 2023.
Tax free Personal Allowance fixed until 2028
One of the measures with the biggest impact for taxpayers under PAYE relates to the tax free personal allowance. The current personal allowance is £12,570 with the autumn statement confirming that this will be kept in place until April 2028 instead of 2024 which was the original plan.
The National Insurance contribution thresholds will also be fixed at their current levels until April 2028. This includes the National Insurance contributions secondary threshold which will be fixed at £9,100 from 6 April 2023.
Additional rate threshold being lowered
The income tax additional rate threshold is being lowered from the start of the 23/24 tax year (6 April 2023).
It is currently set at £150,000 and will be adjusted down to £125,140 which will mean more people will start paying tax at the additional rate.
Dividend Allowance
The Dividend Allowance is currently at £2000 but will be reduced to £1,000 from 6 April 2023, and reduced again to £500 from 6 April 2024.
Other measures announced in the Autumn statement include:
- Company car tax rates will be set at their current rates until April 2028.
- Electric vehicle car tax (VED) is currently nil. From 1 April 2025 electric car owners will need to pay the standard rate of road tax which is £165 per annum. In addition if you own an electric car which has a list price of £40,000 or more you will have to pay an extra £355 premium car tax rate which brings the yearly total to £520.
- Electric vehicle charge points 100 % first year allowance will be extended to 31 March 2025 for corporation tax and 5 April 2025 for income tax.
You can read more about the autumn 2022 statement and the reasoning behind what the government has recently announced.
