The 2023-24 Tax Card: Your quick reference Tax Card
Our Tax Card is up-to-date with everything announced in the 2023 Budget, giving you all the key numbers in one place.
The 2023/24 Tax Card summarises many of the rates and allowances fundamental to our business and personal lives. We are sure that you will find it a useful point of reference throughout the coming tax year. Our tax card contains lots of information on personal, business, employment, property and capital taxes.
Dragon Argent’s London based tax advisers are here to help your business prosper and grow. We proactively advise clients on the tax implications of starting and scaling ambitious businesses whilst optimising their personal tax affairs. We not only deal with compliance related tax obligations, such as VAT and Corporation Tax, but help clients navigate HMRCs landscape of incentives including R&D, (S)EIS and EMI schemes.
Schedule a discovery call with our tax accountants.
INCOME TAX ALLOWANCE
Income Tax is charged on most types of income. The most common way is on your wages and salary from work.
But you also need to pay Income Tax on:
profits, if you run a business
interest and dividends from savings and investments
rent you get if you’re a landlord.
You don’t usually pay Income Tax on all your taxable income. This is because most people qualify for one or more allowances.
An allowance is an amount of otherwise taxable income that you can earn each year, without paying tax on it.
If you earn above the threshold, your Personal Allowance is reduced by £1 for every £2 you earn above it, until it reaches £0.
20% of the Marriage Allowance is given as a reduction in your tax bill. This is unlike the Personal Allowance and Age Allowance, which are deducted from your taxable income before tax is worked out).
1 | Income Tax Allowances | 2022/23 | 2021/22 |
|---|---|---|---|
2 | Personal allowance* | £12,570 | £12,570 |
3 | Personal savings allowance - Basic rate taxpayer - Higher-rate taxpayer - Additional-rate taxpayer | £1,000 £500 £0 | £1,000 £500 £0 |
4 | Dividend allowance at 0% | £2,000 | £2,000 |
5 | Marriage/civil partner transferable allowance** | £1,260 | £1,260 |
6 | Trading and property allowance*** | £1,000 | £1,000 |
7 | Rent-a-room allowance | £7,500 | £7,500 |
8 | Blind person's allowance | £2,600 | £2,520 |
*The personal allowance is reduced by £1 for each £2 of income from £100,000 to £125,140.
**Any unused personal allowance may be transferred to a spouse or civil partners, where the recipient is not liable to higher or additional-rate tax.
***Landlords and traders with gross income form each of these sources in excess of £1,000 can deduct the allowance from their gross income as an alternative to claiming expenses.
INCOME TAX BAND AND RATES
Income Tax is charged on most types of income. The most common way is on your wages and salary from work.
But you also need to pay Income Tax on:
profits, if you run a business
interest and dividends from savings and investments
rent you get if you’re a landlord.
You don’t usually pay Income Tax on all your taxable income. This is because most people qualify for one or more allowances.
An allowance is an amount of otherwise taxable income that you can earn each year, without paying tax on it.
If you earn above the threshold, your Personal Allowance is reduced by £1 for every £2 you earn above it, until it reaches £0.
20% of the Marriage Allowance is given as a reduction in your tax bill. This is unlike the Personal Allowance and Age Allowance, which are deducted from your taxable income before tax is worked out).
1 | Income Tax Bands And Rates | 2022/23 | 2021/22 |
|---|---|---|---|
2 | Starting rate of 0% savings up to* | £5,000 | £5,000 |
3 | Basic-rate band | £37,700 | £37,700 |
4 | Higher-rate band | £37,701 to £150,000 | £37,701 to £150,000 |
5 | Additional-rate band | Above £150,000 | Above £150,000 |
6 | Basic-rate | 20% | 20% |
7 | Higher-rate | 40% | 40% |
8 | Additional-rate | 45% | 45% |
9 | Dividend basic-rate | 8.75% | 7.5%% |
10 | Dividend higher-rate | 33.75% | 32.50% |
11 | Dividend additional-rate | 39.35% | 38.10% |
*The starting rate does not apply if taxable income exceeds the starting rate limit.
CAPITAL GAINS TAX
Income Tax is charged on most types of income. The most common way is on your wages and salary from work.
But you also need to pay Income Tax on:
profits, if you run a business
interest and dividends from savings and investments
rent you get if you’re a landlord.
You don’t usually pay Income Tax on all your taxable income. This is because most people qualify for one or more allowances.
An allowance is an amount of otherwise taxable income that you can earn each year, without paying tax on it.
If you earn above the threshold, your Personal Allowance is reduced by £1 for every £2 you earn above it, until it reaches £0.
20% of the Marriage Allowance is given as a reduction in your tax bill. This is unlike the Personal Allowance and Age Allowance, which are deducted from your taxable income before tax is worked out).
1 | Capital Gains Tax | 2022/23 | 2021/22 | |
|---|---|---|---|---|
2 | Main rates | Individual basic-rate | 10% | 10% |
3 | Individual over basic-rate | 20% | 20% | |
4 | Trusts and estates | 20% | 20% | |
5 | Surcharge - for gains on chargeable residential property and carried interest | 8% | 8% | |
6 | Annual exemption | Individuals | £12,300 | £12,300 |
7 | Trusts | £6,150 | £6,150 | |
8 | Business asset disposal relief | Applicable rate | 10% | 10% |
9 | Lifetime limit | £1m | £1m | |
10 | Investor's relief | Applicable rate | 10% | 10% |
11 | Lifetime limite | £10m | £10m | |
UK COMPANY TAXATION
Income Tax is charged on most types of income. The most common way is on your wages and salary from work.
1 | UK Copmany Taxation | 2022 | 2021 |
|---|---|---|---|
2 | Corporation tax main rate | £12,570 | £12,570 |
3 | Loans to participators | £1,000 £500 £0 | £1,000 £500 £0 |
4 | Diverted profits tax | 25% | 25% |
1 | Main Capital Allowances | 2022 |
|---|---|---|
2 | Initial allowance | |
3 | Annual investment allowance: on first £1m (excludes cars)* | 100% |
4 | Super-deduction: qualifying plant and machinery | 130% |
5 | First-year allowance: special-rate pool | 50% |
6 | First-year allowance: including new and unused electric cars and zero-emission oods vehicles | 100% |
*Applies from 1 January 2019 TO 31 March 2023, reverting to "£200,000 from 1 April 2023. Transitional rules may apply for chargeable periods spanning these dates.
1 | Writing-down Allowances | ||
|---|---|---|---|
2 | Plant and machinery main-rate expenditure | 18% | |
3 | Plant and machinery special-rate expenditure | 6% | |
4 | Cars | 1 - 50g/km | 50% |
5 | More than 50g/km | 6% | |
6 | Structures and buildings allowance - straight-line relief | 3% | |
*An enhanced structure and building allowance of 10% is available in qualifying freeport tax sites.
RESEARCH AND DEVELOPMENT (R&D)
For Small Companies
The R&D tax credit available to small and medium enterprises (SMEs) is a 230% super-deduction with the cash back available to loss making SMEs being c33% of the qualifying expenditure.
The cash value of claims for tax paying companies is c£25 for every £100 of R&D spend (based on a 19% tax rate) and c£33 for companies with losses.
For Large Companies
The large company regime, the Research and Development Expenditure Credit (RDEC) was introduced from 1 April 2013.
RDEC allows larger companies to recognise the benefit of their R&D claim effectively as a grant against cost, opposed to within the tax line, which helps add visibility. Loss makers can also claim cash back from HMRC.
From April 2020, the credit rate increased to 12% (from 11%), providing a net cash benefit of 10.5% at a 19% tax rate. RDEC is payable regardless of the tax position of the company, subject to some restrictions including a cap based on PAYE and NI.
1 | Research and Development (R&D) | |
|---|---|---|
2 | Revenue- expenditure - SMEs | 230%% |
3 | Capital expenditure - all companies | 100% |
4 | SME company R&D payable credit | 14.50% |
5 | Large company R&D expenditure credit (RDEC) | 13% |
TAX-EFFICIENT INVESTMENTS
For Small Companies
The R&D tax credit available to small and medium enterprises (SMEs) is a 230% super-deduction with the cash back available to loss making SMEs being c33% of the qualifying expenditure.
The cash value of claims for tax paying companies is c£25 for every £100 of R&D spend (based on a 19% tax rate) and c£33 for companies with losses.
1 | Annual Investment Limit | 2022/23 | 2021/22 |
|---|---|---|---|
2 | ISA | £20,000 | £20,000 |
3 | Lifetime ISA* | £4,000 | £4,000 |
4 | Help-to-buy ISA (existing savers only) | Up to £200 a month | |
5 | Junior ISA and child trust fund | £9,000 | £9,000 |
6 | Venture capital trust at 30% | £200,000 | £200,000 |
7 | Enterprise investment scheme at 30%** | £1m | £1m |
8 | Seed EIS (SEIS) at 50% | £100,000 | £100,000 |
9 | Social investment tax relief at 30% | £1m | £1m |
*Reduces ISA limit by amount invested in Lifetime ISA.
**Up to £2m in a knowledge-intensive company.
NATIONAL INSURANCE
The R&D tax credit available to small and medium enterprises (SMEs) is a 230% super-deduction with the cash back available to loss making SMEs being c33% of the qualifying expenditure.
The cash value of claims for tax paying companies is c£25 for every £100 of R&D spend (based on a 19% tax rate) and c£33 for companies with losses.
1 | National Insurance Class 1 | |||
|---|---|---|---|---|
2 | Weekly earnings | Employee rate | Weekly earnings | Employer rate |
3 | Up to £190 | Nil* | Up to £175 | Nil |
4 | Over £190 - £967 | 13.25% | Over £175 - £967 | 15.05%** |
5 | Over £967 | 3.25% | Over £967 | 15.05% |
6 | Over state pension age | 0% | Over state pension age | 15.05% |
*Entitlement to contribution-based benefits are retained for earnings between “123 and £190 a week.
**0% for staff under 21 and apprentices under 25 on earnings up to £967 a week, or for new employees in freeport tax sites on earnings up to £481 a week
1 | Class 1A | |
|---|---|---|
2 | On relevant benefits, including car and fuel benefits | 15.05% |
3 | Class 2 | |
4 | Self-employed above small profits thresold | £3.15 a week |
5 | Small profits threshold | £6,725 a year |
6 | Class 3 | |
7 | Voluntary | £15.85 a week |
8 | Class 4* | |
9 | Self-employed on profits above £9,880 - £50,270 | 10.25% |
10 | Over £50,270 | 3.25% |
*Exemption applies if the state retirement ae is reached by 6 April 2022.
DEALING WITH COMPLEX TAX ENQUIRIES OR INVESTIGATIONS?
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Disclaimer:
Dragon Argent have made every effort to ensure accuracy at the time of publication. Rates are for guidance only and information may be subject to legislative changes. The information provided may not reflect individual circumstances and should, therefore, not act on any information without seeking professional advice.
No responsibility for loss occasioned by any person acting/ refraining from action as a result of this information can be accepted by the authors or firm.