For the third time in three months, the Government has made another fiscal statement – lots of changes to be aware of.

Below is a list of bullet points giving the main things to take away from this latest fiscal statement, from the point of view of tax and national insurance.   We shall refrain from any political or social comment!

  • The basic rate of income tax will remain at 20% indefinitely, and will not drop to 19% from April 2023 as was previously announced
  • From 6 April 2023, the point at which individuals pay the additional rate will be lowered from £150,000 to £125,140
  • The income tax personal allowance and higher rate threshold had been fixed at their current levels until April 2026.   These levels will now remain for an additional two years until April 2028, at £12,570 and £50,270 respectively.
  • As from April 2023, the rates of taxation on dividend income will remain as follows:
    • the dividend basic rate – 8.75%
    • the dividend higher rate – 33.75%
    • the dividend additional rate – 39.35%
  • The current tax free annual dividend allowance of £2,000 will drop to £1,000 from April 2023, and then to £500 from April 2024.
  • Because of the changes in the national insurance rates, due to the health and social care levy which was brought in from April 2022 and then removed from 6th November 2022, the national insurance levels for Class 4 NICs for the self employed will be averaged across 2022/23, so that the rates will be 9.73% and 2.73%.
  • The NICs primary threshold and lower profits limit which were increased from 6th July to align with the personal allowance will be maintained at this level from April 2023 until April 2028.
  • Class 2 lower profits threshold will be fixed from April 2023 until April 2028 to align with the lower profits limit. They will again be £12,570 and £50,270 as appropriate.
  • The lower earnings limit and the small profits threshold will also be fixed at 2022/23 levels in 2023/24, which are £6,396 and £6,725 per annum respectively.
  • The government will increase the Class 2  NICs rates for 2023/24 to £3.45 per week.
  • For employers, the Chancellor has fixed the level at which employers start to pay Class 1 NICs for their employees at £9,100 from April 2023 until April 2028.