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 |
| Rate | Threshold |
Personal Allowance | 0% | £12,570 |
Basic rate | 20% | £0 - £37,700 |
Higher rate | 40% | £37,701 - £150,000 |
Additional rate | 45% | 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 | 8.75% |
Higher rate | 33.75% |
Additional rate | 39.35% |
Source: KPMG LLP (U.K.)
