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A New Tax Tear Begins – 2023-24

Happy New Year from your Accountant, it’s 6th April.

I wish I had some wonderful news from our recent Chancellors to share with you as we head into the new tax year.

Not so Good news

For 2023/24 personal allowances have been frozen at £12,570.

In Scotland the basic tax rate of tax is 21% (England is now a tax haven by comparison)

The rate at which we in Scotland start paying higher rate tax has been reduced to £43,663 and the rate has increased to 42%

The level at which we start paying the top rate of tax has been reduced to £125,140 and the rate has been increased to 47%

The Inheritance tax threshold of £325,000 has not been increased since 2009

The VAT threshold of £85,000 has not been increased since 2017

The dividend allowance has been reduced from £2,000 to £1,000 and will be further reduced to £500 from 2024

The dividend tax rate has been increased by 1.25% points

The Capital gains tax exemption has been more than halved from £12,300 to £6,000 and will be reduced to £3,000 from 2025

A freeze on allowances is the new tax!

Better news

The increase in national insurance of 1.25% to pay the “Health & Social Care Levy” has been dropped (for now)

The NI threshold has been increased to £12,570 to bring it in line with the capped personal allowances

The employment allowance has been increased to £5,000. This means small employers pay no employers NI until the amount goes over £5,000

That is good for employers

Good news

The pensions annual allowance has been increased to £60,000

The pensions lifetime allowance will be abolished from 2024

We can prepare your 2023 tax return now and give you ample warning of future tax due.

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