How much income can you receive before paying tax?
- 2023/24 tax year – £12,570 p.a.
- you start to lose this allowance when annual income exceeds £100,000
How much income can you receive before paying higher rate tax (40%)?
- 2023/24 tax year – £50,270 p.a.
How much income can you receive before paying additional rate tax (45%)?
- 2023/24 tax year – £125,140 p.a.
How much dividend income can you receive before paying tax?
- 2023/24 tax year – £1,000 p.a. (reducing to £500 p.a. from 2024/25 tax year)
Tax on Dividends
- Basic rate taxpayers pay 8.75%
- Higher rate taxpayers pay 33.75%
- Additional rate taxpayers pay 39.35%
National Insurance Contributions (NICS)
- From January 6th 2024 Class 1 Employee NICS will reduce from 12% to 10%
- From April 2024 Class 2 Self Employed NICS will be abolished
- From April 2024 Class 4 Self Employed NICS will reduce from 9% to 8%
Capital Gains Tax (CGT)
- The Annual tax exempt Amount of CGT for individuals is £6,000 for the 2023/24 tax year (reducing to £3,000 from 2024/25 tax year)
- Basic rate taxpayers pay 10% (18% on property sale)
- Higher rate taxpayers pay 20% (28% on property sale)
Inheritance Tax (IHT)
- The Inheritance Tax nil-rate band will remain at £325,000 per person until April 2028
- The residence nil-rate band will remain at £175,000 until April 2028
- The residence nil-rate band taper will continue to start at £2 million
ISA contribution limits
- The 2023/24 annual ISA limit is £20,000
- The 2023/24 Junior ISA annual limit is £9,000
A number of changes have been announced for ISAs from April 2024
- It will be possible to make multiple subscriptions to ISAs of the same type in a single tax year
- Partial transfers between providers will be permitted in a single tax year
- Long-term asset funds and open-ended property funds with extended notice periods will be permitted in the Innovative Finance ISA
Pensions
- Lifetime Allowance is being scrapped, but maximum Pension Commencement Lump Sum (“Tax Free Cash”) is frozen at £268,275.
- Annual Allowance for pensions is £60,000.
- “Threshold Income”, before annual pension allowance starts to reduce stands at £200,000. “Adjusted Income” stands at £260,000.
- The Money Purchase Annual Allowance for those who have flexibly accessed their pensions is £10,000. You can contribute £10,000 (gross) in a tax year, even if you have previously “flexibly” accessed a pension. You still need to earn at least £10,000 for this to work.
This blog is intended as information only and does not constitute advice in any way. The information contained herein could be wrong or may have changed by the time you read it so should not be relied upon in any way.