Tax rates 2023/24, 2022/23 and 2024/25 budget  

2024/25 budget 06-Mar-2024

Extracts:
an additional 2p reduction to the main rates of employee and self-employed NICs from 6 April 2024
...
• Abolishing the current tax regime for non-UK domiciled individuals, replacing the outdated concept of domicile with a simpler residence-based regime. Under the new regime, anyone who has been tax resident in the UK for more than four years will pay UK tax on foreign income and gains, as is the case for other UK tax residents. This is a much simpler and clearer test, with less scope for ambiguity than the current system. The new regime will no longer rely on the remittance basis, removing a source of complexity that incentivises individuals to keep income and gains offshore in the current system.
• Announcing the end of the Alcohol Duty Stamps scheme following a review by HMRC. Removing the scheme represents a simplification for the spirits industry which has faced associated cost burdens and complexity.
• Abolishing the Furnished Holiday Lettings (FHL) tax regime from 6 April 2025, meaning short-term and long-term lets will be treated the same for tax purposes. Individuals with FHL and non-FHL properties will no longer need to calculate and report income separately.
• At Autumn Statement 2023, the government announced the removal of the requirement to pay Class 2 NICs and committed to abolishing Class 2 entirely. The government will consult on the details of the reform later this year.

Child benefits; budget 06-Mar-2024 update

Child benefit rates	Tax year 2024/25	Tax year 2023/24
Higher rate (eldest child only) (per week)	£25.00	£24.00
Other children (per week)	£16.95	£15.90
Higher income per year of either partner - no - 0% of Child Benefit repayable	£60,000	50,000
Higher income per year of either partner - all - 100% of Child Benefit repayable	£80,000	£60,000
Between the two: Excess income as a percentage of the difference	% of £20,000	% of £10,000
So if income is:	£61,000	£51,000
Benefit repayable:	£1,000/£20,000 = 5%	£1,000/£10,000 = 10%
The whole amount of the Benefit is repayable when income exceeds:	£81,000	£61,000
Unfair application of the limits
It is not fair that a household with two parents each earning £49,000 a year (2024/25 £59,000 a year) will receive Child Benefit in full, while a household earning less overall but with one parent earning over £50,000 (2024/25 £60,000 a year) will see some or all of the benefit withdrawn. The government is committed to removing this unfairness and moving to a system based on household rather than individual incomes by April 2026, and will consult in due course.

2024/25 Government rates and allowances - full details

Income tax rates: England, Wales & Northern Ireland (non-dividend income)	Tax year 2024/25	Tax year 2023/24	Tax year 2022/23
Personal allowance	£12,570	£12,570	£12,570
0% starting rate for savings only	Up to £5,000	Up to £5,000	Up to £5,000
Interest - Personal Savings Allowance - Basic rate	£1,000	£1,000	£1,000
Interest - Personal Savings Allowance - Higher rates	£500	£500	£500
20% basic rate tax	£12,571-£50,270	£12,571-£50,270	£12,571-£50,270
20% Construction Industry Scheme CIS deduction rate	20% all labour earnings	20% all labour earnings	20% all labour earnings
40% higher rate tax	£50,271-£125,140	£50,271-£125,140	£50,271-£150,000
45% additional rate tax	Above £125,140	Above £125,140	Above £150,000

Dividend income allowances and tax rates	Tax year 2024/25	Tax year 2023/24	Tax year 2022/23
Dividend allowance tax free	£500	£1,000	£2,000
Dividend income basic rate	8.75%	8.75%	8.75%
Dividend income higher rate	33.75%	33.75%	33.75%
Dividend income additional rate	39.35%	39.35%	39.35%
Higher rates apply to total annual income and capital gains above:	£50,270	£50,270	£50,270
Additional rates apply to total annual income (but not capital gains) above:	£125,140	£125,140	£150,000

Corporation tax rates and marginal relief	Tax year 2024/25	Tax year 2023/24	Tax year 2022/23
From 1 April 2015 to 31 March 2023, a single rate of Corporation Tax applied to all companies.	-	-	19%
At the Spring Budget 2021, the government announced that the Corporation Tax main rate for non-ring fence profits would increase to 25% for profits above £250,000.
Profits up to £50,000 all Corporation Tax is 19%	19%	19%	-
Profits over £250,000 all Corporation Tax is 25%	25%	25%	-
Marginal relief for profits between £50,000 and £250,000 is the Upper limit £250,000 Less the Total amount of Profit subject to Corporation Tax x 1.5%
For profits between £50,000 and £250,000, calculate at 25% and then deduct the marginal relief.

Capital gains tax CGT - Residential property	Tax year 2024/25	Tax year 2023/24	Tax year 2022/23
CGT Rate - basic rate tax payer – Residential property	18%	18%	18%
CGT Rate - higher rate tax payer – Residential property	24%	28%	28%
Annual CGT exemptions – individuals (per year on combined Residential property and other capital gains) In the year of sale; this does not accumulate over years	£3,000	£6,000	£12,300
Higher rates apply to total annual income and capital gains above: For Capital gains tax, there is no additional rate above the 24%/28%.	£50,270	£50,270	£50,270
If you only own one property, which has always been your main residence, Private residence relief applies to the whole period, no Capital gains tax is payable and 60 day procedures do not apply.
An Additional relief on capital gains on a Residential property which has BOTH been your main residence AND has been let for part of the time on a commercial basis. Not applicable if it has been let during the period of ownership without being your main residence.
Private residence relief: Actual period of residence plus, in the period prior to disposal	9 Months	9 Months	9 Months
Lettings relief: the Lower of Private residence relief or £40,000 has not been available since 6th April 2020.
When gains are below the Annual exemption and sale proceeds are below four times the Annual exemption there is no need to declare the disposal. If sales are over four times the Annual exemption, do declare the sales; even if profits are below the CGT Annual exemption. Sales from 06/04/2020 you also need to use the 60 day reporting procedure in these circumstances.	£12,000	£24,200	£49,200
Where 60 day procedures apply, the Capital gains tax computation also needs to be included in your annual self assessment tax return. You need to make an annual self assessment tax return even if you do not normally make one. The tax payable may be slightly different depending on how accurate your estimate of other income has been in the 60 day calculation of tax. More or less may be payable at the CGT Rate - higher rate; see above.

Capital gains tax CGT - Other	Tax year 2024/25	Tax year 2023/24	Tax year 2022/23
CGT Rate - basic rate tax payer	10%	10%	10%
CGT Rate - higher rate tax payer	20%	20%	20%
Annual CGT exemptions – individuals (per year on combined Residential property and other capital gains) In the year of sale; this does not accumulate over years	£3,000	£6,000	£12,300
Higher rates apply to total annual income and capital gains above: For Capital gains tax, there is no additional rate above 20%.	£50,270	£50,270	£50,270
Gains on shares are subject to capital gains tax. Dividends on shares are paid gross and are taxable at dividend rates, subject to normal allowances. Bonds issued by the UK government are known as gilts. Capital gains from selling a gilt or when it is redeemed are not subject to capital gains tax. Interest is paid gross and is taxable, subject to normal allowances.
Business Asset Disposal Relief BADR - was known as Entrepreneurs’ Relief before 6 April 2020 Capital Gains Tax at 10% on all gains when disposing of qualifying assets. Individuals only - within their lifetime. Claim within one year of the 31st January Self Assessment filing date. 2023/24; 31st January 2025 + one year - by 31st January 2026.
Business Asset Disposal Relief BADR. The lifetime limit is £1 million from 11 March 2020.	£1 million lifetime limit	£1 million lifetime limit	£1 million lifetime limit

Funds withdrawn from a company which has been struck off at Companies House.	Tax year 2024/25	Tax year 2023/24	Tax year 2022/23
Maximum treated as Capital Gain	£25,000	£25,000	£25,000
Any excess is taxed as income.

Tax rates after the Chancellors autumn statement 22-Nov-2023

National Insurance	2023/24 from 06/01/2024	2023/24	2022/23	2021/22
Class 1 PAYE
Class 1 Employees
Lower earnings limit, primary class 1 (perweek) Class 1 - Lower earnings limit LEL, primary Class 1, minimum earnings to qualify for State pension and payroll benefits - set up a PAYE scheme at this level (per week) If you already have a PAYE scheme you do not have to enter employees paid below this level but you still need to check the: ⚫ Employee right to work in UK under Prevention of Illegal Working regulations and ⚫ Apply minimum wage regulations. applied on a weekly basis, except for directors (per year)	Same	£123	£123	£120
Lower earnings limit, primary class 1 This is the minimum rate of income to build up qualifying years for State Pension.	Same	£6,396 per annum	£6,396 per annum	£6,240 per annum
Primary threshold (per week) * Employees start paying NI above this point. applied on a weekly basis, except for directors (per year). from 6 April 2022 to 5 July 2022 from 6 July 2022 to 5 April 2023	Same	£242	£190 £242	£184
Employee’s primary class 1 rate between primary threshold and upper earnings limit From 6 April 2022 to 5 November 2022 From 6 November 2022 to 5 January 2024 reduced 6 January 2024 to April 2024 then subject to The Budget on 06/03/2024	10%	12%	13.25% 12%	12%
Upper earnings limit, primary class 1 (perweek) * Employees pay a lower rate of NI above this point	Same	£967	£967	£967
Apprentice upper secondary threshold (AUST)for under 21s/25s	Same	£967	£967	£967
Employee’s primary class 1 rate above upper earnings limit from 6 April 2022 to 5 November 2022 from 6 November 2022 to 5 April 2023	Same	2%	2%	2%
Class 1 Employers
Secondary threshold (per week) * Employers start paying NI above this point but claim Employment allowance	Same	£175	£175	£170
Secondary threshold - Company owner/director tax and NI free salary for the company but added to the directors' personal income and may be taxable in Self Assessment depending on the director's other income.	Same	£9,100 per annum	£9,100 per annum	£8,840 per annum
Employer's secondary class 1 rate above secondary threshold There is no upper limit. from 6 April 2022 to 5 November 2022 from 6 November 2022 to 5 April 2023	Same	13.8%	15.05% 13.8%
Employment allowance (per year/employer) * Employers claim the current month applicable amount of Employment Allowance against your employer’s national insurance contributions.	Same	£5,000	£5,000	£4,000
You cannot claim Employment Allowance if both of the following apply: You're a company with only one employee paid above the Class 1 National Insurance secondary threshold and The employee is also a director of the company.
Class 1 Employees - Married woman’s reduced rates
Married woman’s reduced rate between primary threshold and upper earnings limit from 6 April 2022 to 5 November 2022 from 6 November 2022 to 5 April 2023	3.85%	5.85%	7.1% 5.85%
Married woman’s rate above upper earnings limit from 6 April 2022 to 5 November 2022 from 6 November 2022 to 5 April 2023	Same	2%	3.25% 2%	2%
Class 2 Self employed
Class 2 rate (per week where profits are above lower profits limit threshold) Proposal to be abolished 22/11/2023	Same	£3.45	£3.15	£3.05
Class 2 smallprofits threshold (per year)	Same	£6,725	£6,725	£6,515
Lower profits limit New from 2022/23; Self employed are credited with one qualifying year for State Pension when profits exceed the smallprofits threshold but do not have to pay Class 2 National Insurance unless profits exceed the lower profits limit	Same	£12,570	£11,908	not applicable
Class 3 voluntary contributions
Class 3 voluntary rate (per week)	Same	£17.45	£15.85	£15.40
Class 3 voluntary rate to build up qualifying years for State Pension	Same	£907.40 per annum	£824.20 per annum	£800.80 per annum
Class 4 Self employed
Class 4 lower profits limit	Same	£12,570	£11,908	£9,568
Class 4 upper profits limit	Same	£50,270	£50,270	£50,270
Class 4 rate between lower profits limit and upper profits limit	8%	9.73%	9.73%	9.00%
Class 4 rate above upper profits limit	Same	2.73%	2.73%	2.00%
Class 1A/1B - Class 1 benefits
Class 1A/1B NIC	Same	14.53%	14.53%	13.8%

Workplace Pension Scheme	Tax year 2023/24	Tax year 2022/23	Tax year 2021/22
Category 1 employees - Have a right to join a Workplace pension scheme But employee-only contributions. Ages 16 to 74	Earning up to 6,240 per annum 520 per month	Earning up to 6,240 per annum 520 per month
Category 2 employees - Have a Right To Opt In to a Workplace pension scheme - employee and employer contributions Ages 16 to 74	Earning over 6,240 per annum 520 per month	Earning over 6,240 per annum 520 per month
Category 3 employees - Automatic Enrolment employees are Aged 22 to State Pension Age. Enroll within six weeks of the employee start date.	Earning above 10,000 per annum 833.33 per month	Earning above 10,000 per annum 833.33 per month	Earning above 10,000 per annum 833.33 per month
Directors are exempt from Automatic Enrolment into a Workplace Pension Scheme unless there are two or more directors who have contracts of employment. Most one-man companies or family companies do not have directors with contracts of employment.
Workplace pensions Minimum contributions are:
Employer Minimum Contribution	3%	3%	3%
Employee Minimum Contribution	5%	5%	5%
Total Minimum Contribution - Employer and Employee combined	8%	8%	8%
On earnings in excess of the Lower level of qualifying earnings 'threshold':	6,240 per annum 520 per month	6,240 per annum 520 per month
Deductions from the employee are from the figure after tax and national insurance deductions.
The employee gets tax relief at the income tax standard rate: So with the standard rate at 20%, when the employee contribution is £100.00 the deduction will show on the payslip as £80.00; this is calculated as £100.00 less 20% = £80.00. £100 goes into the pension pot.
The employer gets tax relief by including amounts paid, as employer contributions, in annual Financial Statements and Corporation Tax returns.
Depending on the rules of the scheme, the employee can pay-in less as long as the employer puts-in enough to meet the Total Minimum Contribution.

Employee vehicles: Mileage Allowance Payments (MAPs)	Tax year 2023/24	Tax year 2022/23	Tax year 2021/22
Car - first 10,000 miles - per mile	45 pence	45 pence	45 pence
Car - subsequent miles - per mile	25 pence	25 pence	25 pence
Motorcycle - per mile	24 pence	24 pence	24 pence
Cycle - per mile	20 pence	20 pence	20 pence
VAT registered traders may reclaim VAT on the fuel element using HMRC fuel mileage rates according to fuel type and engine size.

Tax interest on late payment	Late payment % pa
From 22 August 2023	7.75%
From 11 July 2023	7.50%
From 31 May 2023	7.00%
Linked to changes in the Bank Rate.

State pension income	Tax year 2024/25	Tax year 2023/24	Tax year 2022/23	Tax year 2021/22
The basic State Pension if you reached State Pension age before 6 April 2016 - per week	£156.20	£156.20	£141.85	£137.60
The new State Pension if you reached State Pension age on or after 6 April 2016 - per week a man born on or after 6 April 1951 or a woman born on or after 6 April 1953	£221.20	£203.85	£185.15	£179.60
Increase basis on prior year	Average weekly earnings AWE 8.5% Triple lock policy	Consumer Prices Index CPI 10.1% Triple lock policy	Consumer Prices Index CPI 3.1% Triple lock policy	Triple lock base 2.5% Triple lock policy
The triple lock policy is the higher of Average weekly earnings AWE, Consumer prices index CPI, Retail price index RPI or 2.5%.
New State Pension paid pro rata by qualifying years; 10 years minimum; 10/35ths entitlement; 35 years maximum full entitlement. There is no benefit in paying more than 35 years.
If you defer drawing your State pension: The basic State Pension is increased by 10.4% for each year you defer. The new State Pension is increased by 5.8% for each year you defer. Pro rata increases for periods of less than one year.

Check your State Pension qualifying years using the Government Gateway

From the Chancellors autumn statement 17-Nov-2022