The threshold when the highest earners start paying the top rate of tax will be lowered from £150,000 to £125,140 from 6 April 2023. This rate will remain at 45% in England, Wales and Northern Ireland but will go up in Scotland from 46% to 47%.
The thresholds for the basic rate and higher rate will remain the same. The rates will also stay the same in England, Wales and Northern Ireland, but in Scotland the higher rate will go up from 41% to 42%.
The annual threshold for paying National Insurance will remain at £12,570 a year for employees and self-employed workers. It was increased in July 2022 to bring it into line with the personal allowance for income tax.
The National Insurance rate returned to 12% in November 2022 after briefly being raised to 13.25%. It will stay at this level in the 2023/2024 tax year.
The National Living Wage for people aged over 23 will go up by 9.7% to £10.42 per hour. There will also be increases to the National Minimum Wage for those aged under 23.
State Pensions will rise by 10.1% in 2023/2024 in line with the triple lock. Those on the full new single-tier State Pension will receive £203.85 a week, up from £185.15. The old basic State Pension will go up from £141.85 a week to £156.20.
The annual allowance for adding to your pension pot tax-free, has also gone up for most people from £40,000 to £60,000 in 2023-2024.
The annual tax-free allowance for dividends will be halved from £2,000 to £1,000 from 6 April 2023. The annual exemption amount for Capital Gains Tax (CGT) will also be cut – from £12,300 to £6,000 from 6 April 2023.
The Chancellor Jeremy Hunt announced in his Autumn Statement 2022 that these allowances would be reduced again in the 2024/2025 tax year.
If you want to make the most of the tax-free allowances or you’re looking to boost your savings pot this financial year, read our guide on how to save money.
