Income Tax Changes - Chancellor Jeremy Hunt’s Autumn Statement

On 17-11-2022, Chancellor Jeremy announced a few changes to income taxes related to unearned income and dividends. A summary of these changes has been explained below:

Top Earners

Previously people earning more than £150,000 were taxed at a higher rate. This threshold has been reduced to £125,140. This means the bracket has been reduced, allowing more people to pay taxes at a higher rate.

This will result in £1,200 more taxes paid in a year by the taxpayer.

Dividend Allowance

The dividend allowance has been reduced from £2,000 a year to £1,000 for the year 2023. This will be further reduced to £500 from April 2024 onwards. This means more of the dividend taken by owners will be tax liable.

Capital Gains Allowance

The government has also reduced the allowance given (Tax-Free income) on Capital Gains. This was previously £12,300 but has been reduced to £6,000 in 2023 and £3,000 in 2024.

Other Income Taxes

Furthermore, allowances and thresholds for income tax, national insurance, and inheritance tax will be frozen for a further two years, creating a new deadline of April 2028 - meaning that as people's wages go up, they will be paying more in tax.

In Conclusion

We at Cheylesmore Chartered Accountants are prepared to meet the challenging nature of changes in Taxes and how it impacts everyday individuals. Feel free to contact us and our experts will be more than happy to guide you through the fine print.