With the new tax year approaching on 6 April, what are the forthcoming tax rate changes in the 2022-23 tax year.
National Insurance threshold and rate changes
On 6 April, National Insurance (NI) rates will increase by 1.25%. The government is introducing a health and social care levy, where working people contribute to funding the NHS and social care crisis.
You will see this taken with the rest of your NI payments in 2022-23 but in April 2023, the levy will officially split. Next tax year (2023-24), the levy will be paid by those above state pension age but still at work.
In line with September 2021 CPI inflation, the NI lower-earning limits are increasing by 3.1%. However, upper earning thresholds are frozen at £50,270.
See below for a table showing 2021-22 NI rates and thresholds compared to what they will look like in 2022-23 for employees and self-employed.
Employees paying Class 1 NICs
| 2021-22 | 2022-23 | ||
| Earnings threshold | Class 1 rate | Earnings threshold | Class 1 rate |
| Less than £9,568 | 0% | Less than £9,880 | 0% |
| £9,568 – £50,270 | 12% | £9,568 – £50,270 | 13.25% |
| More than £50,270 | 2% | More than £50,270 | 3.25% |
Self-employed paying Class 2 & 4 NICS
| 2021-22 | 2022-23 | ||
| Earnings threshold | Class 2 & 4 rate | Earnings threshold | Class 2 & 4 rate |
| Less than £6,515 | 0% | Less than £6,725 | 0% |
| £6,515 – £9,568 | £3.05 per week (Class 2) | £6,725 – £9,880 | £3.15 |
| £9,568 – £50,270 | 9% + £3.05 per week | £9,568 – £50,270 | 10.25% +£3.15 per week |
| More than £50,270 | 2% + £3.05 per week | More than £50,270 | 3.25% + £3.15 per week |
Class 3 NICs
| 2021-22 | 2022-23 | |
| Class 3 contributions | £15.40 per week | £15.85 per week |
Dividend tax rates
If you earn money from dividends, you’ll see a similar increase of 1.25% from April.
You may pay dividend tax if you’re an investor that earns money from company shares. Tax is charged on the amount you earn over the dividend allowance, unchanging at £2,000 for the next tax year.
| Income tax band | Dividend tax rate 2021-22 | Dividend tax rate 2022-23 |
| Basic rate | 7.5% | 8.75% |
| Higher rate | 32.5% | 33.75% |
| Additional rate | 38.1% | 39.35% |
Income Tax thresholds to rise in Scotland
In December 2021, the Scottish Parliament announced a raise in some of its income tax thresholds from April 2022.
Scotland has different rates and thresholds from other UK nations, as income tax is devolved.
| 2021-22 | 2022-23 | |||
| Tax band | Income | Tax rate | Income | Tax rate |
| Personal allowance | Up to £12,570 | 0% | Up to £12,570 | 0% |
| Starter rate | £12,570 – £14,667 | 19% | £12,570 – £14,732 | 19% |
| Basic rate | £14,667 – £25,297 | 20% | £14,732 – £25,689 | 20% |
| Intermediate rate | £25,297 – £42,663 | 21% | £25-689 – £43,663 | 21% |
| Higher rate | £43,663 – £150,000 | 41% | £43,663 – £150,000 | 41% |
| Top rate | Over £150,000 | 46% | Over £150,000 | 46% |
Extension to Capital Gains Tax (CGT) reporting
Are you making a capital gain after selling a property?
Announced in the Autumn Budget 2021, the 30-day window for taxpayers to report the gain and pay the tax owed has increased to 60 days.
If you sold a second home or a buy-to-let property on or after 27 October 2021 and make a capital gain, you will need to submit a residential property return to HMRC and make a payment on account within 60 days.
If your property sale was between 6 April 2020 – 26 October 2021, you must report and pay CGT within 30 days.
Want to see the new tax rates for 2022-23? Download our free Tax Rate Card here.
If you have any questions on the coming tax changes 2022-23 and how these may affect you, please contact our tax team today.
