Planning for the end of the 2022/23 Tax Year

6 days, 5 hours ago by Oliver Atkinson

As we reach the end of another tax year and move into 2023/24, there are a few rule changes and new rates to be introduced from April 2023 that could be worth considering before we hit the 5th April.

Personal

Dividend Tax Rates

For company directors looking to take dividends from their Ltd companies, any dividends from the 6th of April 2023 will be subject to the new increased rates. The rates have increased by 1.25% across the board and as such if you are anticipating taking a dividend from your Ltd company, it may be worth planning this around the new introduction of the new rate in April.

Capital Gains

Planning on selling any assets? The capital gains tax allowance is going to be reduced from the 6th of April to £6,000, from its current level of £12,300. Whilst the tax rates are not due to change, the allowance adjustment will push more people selling houses or shares into the starting 10% tax rate for capital gains. The £6,000 allowance will be available for a year, before the rate is halved to £3,000 from April 2024. If you were intending to sell any assets, you would benefit from ensuring that any sales are completed before the 5th of April 2023

Threshold Changes

For those who receive an income of over £125,000 per year, you may soon be in a new tax bracket – the threshold for the 45p top rate is being lowering to £125,140 from it’s current level of £150,000 from April 2023. This means you should consider planning on putting a bit more aside to pay any extra tax due through self-assessment over the course of the 2023-24 tax year in advance of your 2024 tax return.

ISA Allowance

The annual ISA allowance is £20,000 again for 2023/24 which will refresh on the 6th of April 2023. If you haven’t taken advantage of your annual ISA allowance for 2022/23, then the last chance to do so will be by the 5th of April.

Business

Super-deduction to end on 31st March 2023

The corporation tax ‘super-deduction’ introduced in 2021 will come to a close at the end of March 2023. The scheme allows business purchasing qualifying assets to claim up to 130% of their value against their corporation tax bill. The final date for purchasing any qualifying assets will be the 31st of March 2023, with anything purchased after to fall under the standard rules.

Corporation Tax increase

Corporation tax is set to rise from the 6th of April 2023set to rise from the 6th of April 2023, with any profits after this date subject to the new 25% rate. Of course, if your company’s financial year crosses both tax years, the new rate will be only be applied to a portion of your profits based on how many days of your financial year fall into the 2023/24 tax year, with the rest still taxable under the 2022/23 rate of 19%.

This won’t affect businesses with profits of £50,000 or lower, but any profits over this amount will be subject to the 25% rate with some relief available up to a profit threshold of £250,000. If the new change will affect your business, it’s a good idea to start thinking about this now and ensuring you have a plan in place to pay tax at the new rate.

National Living Wage changes

National Living Wage is set to increase again, so be ready from the 6th of April to pay your staff at the new following rates per hour:

· 23 and over – from £9.50 to £10.42
· 21-22 – from £9.18 to £10.18
· 18-20 – from £6.83 to £7.49
· 16-17 & Apprentices – from £4.81 to £5.28

Contact our team here if you have any questions.