2022 was certainly a tumultuous year for Britain, both politically and economically. We saw three Prime Ministers and four Chancellors of the Exchequer, which in turn led to some tax measures being announced and later abolished. Readers could, therefore, be forgiven for being unsure which measures are still going ahead.
In the end, the current Chancellor, Jeremy Hunt, has decided to limit the number of changes, to steer the UK through the current cost of living crisis. While there have been few major tax structural or policy changes, or increases to headline tax rates, taxes for most will still be going up in 2023 – achieved through the freezing or reduction of thresholds.
Changes include a reduction in the income tax rate additional threshold (at which taxpayers begin to pay tax at 45%) from £150,000 to £125,140 from 6 April 2023. There will also be staged reductions in the annual exempt amount for capital gains tax (CGT) from £12,300 to £6,000 from 6 April 2023, and then to £3,000 from 6 April 2024 – which, while not increasing taxes significantly for most, will mean that more disposals will need to be reported to HM Revenue & Customs (HMRC), and will increase the administrative burden on taxpayers.
The Health and Social Care Levy (HSCL), introduced in April 2022 as a 1.25% increase in National Insurance rates, has also now been removed as of November 2022. However, the corresponding 1.25% increase in the main and higher rates of dividend taxation remains in place. And for companies, the planned increase in the main corporation tax rate to 25% will be going ahead from April 2023.
The government’s Making Tax Digital (MTD) programme for income tax has now been delayed until April 2026 at the earliest. However, you may still want to consider moving to digital record-keeping before then, to realise other efficiency benefits.
Given changes coming into play from April 2023 that may affect the amount of tax you pay, it may be a good time to consider how to make the most of the reliefs and allowances available to you.
We have split our year-end tax planner into seven sections so you can find the relevant section for you and/or your business:
- Year-end tax planning for individuals.
- Year-end tax planning for business owners.
- Year-end tax planning for employers and employees.
- Year-end tax planning for property owners.
- Year-end tax planning for overseas individuals.
- Year-end tax planning and tax efficient investments.
- Year-end tax planning and going digital.