Income tax rates stand still

Undoing all measures announced since 23 September 2022, the income tax rates applicable to non-dividend income remain as they are now; namely a 20% basic rate, a 40% higher rate and a 45% additional rate (for those with income over £150,000).

For dividends, although the associated 1.25 percentage point supplement on NICs is being removed from 6 November, income tax rates on dividends will not be reduced. They will remain as they are now; namely a 8.75% basic rate, a 33.75% higher rate and a 39.35% additional rate. The first £2,000 of dividend income continues to be tax-free.

The upcoming Autumn Statement will need to be closely monitored to confirm income tax rates in 2023/24.

Impact on profit extraction

The corporation tax rate increases and the continuance of the higher income tax rates on dividends

will impact on the profit extraction strategies adopted by director/shareholders in 2023/24.

Again, this may be affected by the Autumn Statement on 17 November 2022 but please do contact us to discuss how the changes affect you.

Need more information?

Do you need further guidance on income tax rates? We offer a wide range of services which are unique to your businesses who are just getting going! Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

Our fantastic team at A&C Chartered Accountants are here to help.

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