With effect from 6 April 2022 there has been an increase in some of the National Insurance and Income Tax thresholds.
The following Income Tax and National Insurance thresholds and rates will apply from 6 April 2022 to 5 April 2023:-
Income Tax Rates & Bands
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on. Your Personal Allowance may be different depending if your claim certain allowances or if your income is over £100,000.
The table below shows the rates if you have a standard Personal Allowance of £12,570
England, Northern Ireland and Wales:-
| Tax Bands | 2022-2023 |
|---|---|
| Personal Allowance | 0% up to £12,570 |
| Basic tax rate | 20% on annual earnings between £12,571 and £50,270 |
| Higher tax rate | 40% on annual earnings between £50,271 and £150,000 |
| Additional tax rate | 45% on annual earnings above £150,000 |
Scotland:-
| Tax Bands | 2022-2023 |
|---|---|
| Personal Allowance | 0% up to £12,570 |
| Starter tax rate | 19% on annual earnings between £12,571 and £14,732 |
| Basic tax rate | 20% on annual earnings between £14,733 and £25,688 |
| Intermediate tax rate | 21% on annual earnings between £25,689 and £43,662 |
| Higher tax rate | 41% on annual earnings between £43,663 and £150,000 |
| Scottish top tax rate | 46% on annual earnings above £150,000 |
Class 1 NIC Thresholds 2022-2023
| Class 1 National Insurance thresholds | per week | per month | per year |
|---|---|---|---|
| LEL | £123 | £533 | £6,396 |
| Primary Threshold (PT) – 6 Apr 2022 – 5 Jul 2022 | £190 | £823 | £9,880 |
| Primary Threshold (PT) – 6 Jul 2022 – 5 Apr 2023 | £242 | £1,048 | £12,570 |
| Primary Threshold (PT) – Directors for the whole year | £229 | £11,908 | |
| Secondary Threshold (ST) | £175 | £758 | £9,100 |
| Freeport upper secondary threshold | £481 | £2,083 | £25,000 |
| Upper Secondary Threshold (under 21) | £967 | £4,189 | £50,270 |
| Apprentice Upper Secondary Threshold (apprentice under 25) | £967 | £4,189 | £50,270 |
| Veterans upper secondary threshold | £967 | £4,189 | £50,270 |
| Upper Earnings Limit (UEL) | £967 | £4,189 | £50,270 |
Note, Employees pay National Insurance Contributions on earnings above the Primary Threshold. Employers pay National Insurance Contributions on salary payments above the Secondary Threshold.
Dividend Tax Rates 2022-2023
The dividend tax rates in the 2022 – 2023 tax year are as follows:-
- The tax-free dividend allowance remains at £2,000.
- Basic-rate taxpayers pay 8.75% on dividends.
- Higher-rate taxpayers pay 33.75% on dividends.
- Additional-rate taxpayers pay 39.35% on dividends.
Business Mileage Allowances
There has been no change to HMRC’s approved mileage allowance payments which remain as follows:-
| First 10,000 Miles | Over 10,000 Miles | |
| Car / Van | £0.45 | £0.25 |
| Motorcycle | £0.24 | £0.24 |
| Bicycle | £0.20 | £0.20 |