Spring Statement 2022 - Income Tax and Capital Gains Tax
Posted on: March 23rd 2022 · read
For the first time in 16 years, the government is proposing to cut the basic rate of income tax by one percent, from 20% to 19%, with effect from April 2024. The government believes this will benefit over 30 million taxpayers in 2024/25 and should result in an average tax saving of £175 per taxpayer.
To ensure charities are not worse off by the proposed reduction in income tax, there will be a three-year transitional period for Gift Aid relief to maintain the basic rate tax relief at 20% until April 2027. This is a welcome announcement for almost 70,000 charities in the UK.
Capital gains tax
There has been speculation for a number of years that the Chancellor is going to increase the rate of capital gains tax, however no such announcements were made. The current rates of capital gains tax are 10% (18% for residential property) for basic rate payers and 20% (28% for residential property) for higher rate taxpayers
Allowances from April 2022
Many rates and allowances were frozen until 2026 following announcements made in the March 2021 Budget, these remain unchanged following the Spring Statement 2022. A summary of these thresholds are listed below:
|Allowances until April 2026|
|Higher rate threshold||£50,270|
|Additional rate threshold||£150,000|
|Capital gains tax|
|Nil rate band||£325,000|
This article is a part of our dedicated Spring Forecast Statement hub. For more analysis and insight, please click here.