As we reported in GMS Flash Alert 2022-172, then-Chancellor of the Exchequer, Kwasi Kwarteng, announced a Growth Plan to the U.K. Parliament on 23 September.1, 2

Following significant push-back from across the political spectrum, on 3 October 2022, the Chancellor announced that the proposed abolition of the 45% top rate would not go ahead (see our report in GMS Flash Alert 2022-177).3

Due to further market unrest, the new Chancellor, Jeremy Hunt, has announced that all the tax measures announced in the Growth Plan that have not been legislated for in Parliament will not be going ahead.4


The personal income tax rates are of great interest to employers, as these impact the cost of assignments, payroll withholding, and hypothetical tax deductions.

Employers may well be concerned about the level of uncertainty regarding current and future changes to the U.K. tax system – this is the second reversal of an announced tax rate change within as many weeks.

What Will Change, What Will Not

The previous Chancellor announced in the Growth Plan that the basic rate of income tax would be reduced from 20% to 19% from 6 April 2023.  This proposed measure has been dropped, and the basic rate of tax will remain at 20% indefinitely.

The National Insurance reduction and the repeal of the Health and Social Care Levy will still be going ahead, as the legislation for this has already started its passage through Parliament.

The tax rates for Scottish and Welsh taxpayers will be set by the Scottish Parliament and Welsh Senedd respectively later in 2022.

The updated income tax rates for the 2023/24 U.K. tax year following the latest announcement are shown in the table below:


2023/24 tax year




Personal Allowance



Basic rate


£0 - £37,700

Higher rate


£37,701 - £150,000

Additional rate


Over £150,000

Source: KPMG LLP (U.K.)

The previous Chancellor had announced that the dividend tax rate would reduce by 1.25% with effect from 6 April 2023.  This reduction will now not go ahead, with the dividends remaining at the same rate as for the 2022/23 tax year.  The updated dividend tax rate for the 2023/24 tax year is shown in the table below.


2023/24 tax year

Basic rate


Higher rate


Additional rate


Source: KPMG LLP (U.K.)

Other Measures

The 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) will not be repealed.  Therefore, the obligation to determine the employment status of a worker providing services via an intermediary will continue to apply to the end user of the services (where that entity is a large- or medium-sized business, or a public sector body).

The Chancellor confirmed in the House of Commons regarding the intent to proceed with the abolition of the cap on banker’s bonuses.

Next Steps

Mr. Hunt, the Chancellor, will announce further measures at the Medium-Term Fiscal Plan, expected on 31 October 2022.


It is essential to get in front of the changes described in this newsletter and to communicate quickly and clearly with key stakeholders, so that they can properly plan, budget, and make necessary adjustments.

KPMG LLP (U.K.) will endeavour to continue to keep readers informed of any further developments that concern individuals, including those on international assignments, and their multinational employers.


1  For the U.K.’s "Growth Plan 2022," see:

2  For coverage by KPMG LLP (U.K.) of the Autumn 2022 Growth Plan, see GMS Flash Alert 2022-172 (27 September 2022).

3  For coverage by KPMG LLP (U.K.) of the cancellation of the abolition of the 45% tax rate, see GMS Flash Alert 2022-177 (4 October 2022).

4  For the announcement of the measures announced by the Chancellor of the Exchequer on 17 October 2022, see: .

The information contained in this newsletter was submitted by the KPMG International member firm in the United Kingdom.


Connect with us

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today


GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2024 KPMG LLP a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organisation please visit