Upcoming Finance and Tax Changes April 2023
Following the Chancellors March Budget 2023 update, this blog looks at the main tax rates for 2023/24 including some of the changes just announced affecting businesses in England and Northern Ireland. For tax rates for Scotland and Wales, visit the Government website.
Allowances and Tax rates 2023/24
Income tax personal allowance
This allowance remains as per 2022/23 at £12,570 per annum.
Income tax rates
| Income | Tax rate |
| £0-£12570 | 0% |
| £12,570 – £50,270 | 20% |
| £50,270- £125,140 | 40% |
| Over £125,140 | 45% |
Class 1 National Insurance Rates- Employee
Class 1 NICs depend on which category of employee you are in but for most employees the rate remains 0% for earnings below the primary threshold (£12,570), 12% for earnings between the primary threshold and the upper earnings limit (£50,270), with a further 2% on earning above upper earnings limit.
Class 1 National Insurance Rates – Employer
Employers pay 13.8% for most categories of employee for earnings above the secondary threshold (£9,100) per year. For more details on all the different NI categories, visit the Government website.
National Minimum Wage
National Minimum Wage rates for 2023/24 include a significant uplift due to the high level of inflation in 2022.
| Employee Age | 2023/24 Wage Per Hour | 2022/23 Wage Per Hour |
| Apprentices | £5.28 | £4.81 |
| 16 and 17 | £5.28 | £4.81 |
| 18 to 20 | £7.49 | £6.83 |
| 21 to 22 | £10.18 | £9.18 |
| 23+ (National Living Wage) | £10.42 | £9.50 |
Statutory Maternity, Paternity, Adoption, Shared Parental and Bereavement Pay
The weekly rates for SMP, SPP, SAP, ShPP and SPBP increased is £172.48 per week or 90% of your weekly earnings if the figure is less than the statutory rate.
Statutory Sick Pay
Statutory Sick Pay (SSP) will be £109.40 per week for 2023/24. However, employees must be paid for each day they are off work due to an illness. The daily rate would then depend on the number of days that they work each week. This can be tricky to work out so you can check out the Statutory Sick Pay calculator or give us a call.
Student Loans
Rates and thresholds for student loan deductions vary according to which student loan plan your employee is on.
| Threshold | Deduction rate |
| Plan 1 £22,015 per year | 9% |
| Plan 2 £27,295 per year | |
| Plan 4 £27,660 per year | |
| Postgraduate loans £21,000 | 6% |
Dividend Tax
| Dividends | Rate |
| £0-£1000 | 0% |
| Basic rate | 8.75% |
| Higher rate | 33.75% |
| Additional rate | 39.35% |
Capital Gains Tax
The tax changes in 2023 relating to CGT allowance could result in significant bills for investors as the tax-free allowance drops from £12,300 to £6,000 in 2023/24 (£3,000 for trustees). Rates remain the same as 2022/23 at 10% basic rate and 20% higher rate for all assets except residential property where the rates are 18% and 28% respectively.
Inheritance Tax
Estates worth less than £325,000 are tax-free with any amount above this attracting a 40% tax rate. The additional residence nil rate band is £175,000.
Pension Allowances
The annual tax-free allowance for pension contributions has increased from £40,000 to £60,000 and the lifetime allowances which was £1.07m in 2022/23 has been abolished.
Corporation Tax
Small profits rate for companies earning under £50,000 profit is 19% for 2023/24. Companies with profits between £50,000 and £250,000 will pay tax on a sliding scale towards the full rate of £25%.
Support for tax changes in 2023
It can be time-consuming to get to grips with all the tax changes in 2023 that might affect your business. The team at Adams Accountancy keep up to date, so you don’t have to worry. Get in touch with us to find out how we can support your business and personal finances. Call 01322 250001 or email info@adams-accountancy.co.uk today.
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