The additional rate of income tax currently applies at a rate of 45% for income over £150,000. Although it was originally announced in the Growth Plan that this would be abolished from 6 April 2023, this will no longer be going ahead.
The Chancellor also announced in the Growth Plan that the basic rate of income tax would be reduced from 20% to 19% from 6 April 2023. It is understood that this change will still be going ahead, as is the repeal of the Health and Social Care Levy.
It is not clear yet whether the Chancellor will also reverse the abolition of the additional dividend tax rate.
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 |
| Rate | Threshold |
Personal Allowance | 0% | £12,570 |
Basic rate | 19% | £0 - £37,700 |
Higher rate | 40% | £37,701 - £150,000 |
Additional rate | 45% | Over £150,000 |
Source: KPMG LLP (U.K.)
The U.K. income tax rates and other measures announced in the Growth Plan will be legislated for in the next Finance Bill. The timing of this has not been announced yet; however, it is expected that this will be enacted in Q1 2023.