Tax changes 2022-23: Are you ready for April 6?

Tax changes 2022-23 tax time on yellow sticky note with yellow clock

Tax changes 2022-23: Are you ready for April 6?

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

Earnings thresholdClass 1 rateEarnings thresholdClass 1 rate
Less than £9,5680%Less than £9,8800%
£9,568 – £50,27012%£9,568 – £50,27013.25%
More than £50,2702%More than £50,2703.25%

Self-employed paying Class 2 & 4 NICS

Earnings thresholdClass 2 & 4 rateEarnings thresholdClass 2 & 4 rate
Less than £6,5150%Less than £6,7250%
£6,515 – £9,568£3.05 per week (Class 2)£6,725 – £9,880£3.15
£9,568 – £50,2709% + £3.05 per week£9,568 – £50,27010.25% +£3.15 per week
More than £50,2702% + £3.05 per weekMore than £50,2703.25% + £3.15 per week

Class 3 NICs 

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 bandDividend tax rate 2021-22Dividend tax rate 2022-23
Basic rate7.5%8.75%
Higher rate32.5%33.75%
Additional rate38.1%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.

Tax bandIncomeTax rateIncome Tax rate
Personal allowanceUp to £12,5700%Up to £12,5700%
Starter rate£12,570 – £14,66719%£12,570 – £14,73219%
Basic rate£14,667 – £25,29720%£14,732 – £25,68920%
Intermediate rate£25,297 – £42,66321%£25-689 – £43,66321%
Higher rate£43,663 – £150,00041%£43,663 – £150,00041%
Top rateOver £150,00046%Over £150,00046%

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.

Tim Cook
Partner at Wilder Coe
Tim’s passion lies in helping his clients maximise their wealth through successful tax planning for the future. Whether you are seeking a solution on the most efficient way to implement your inheritance plans or would simply like some plain-English advice on your tax liabilities, Tim is expertly placed to offer you a highly professional and personalised service.