MHA | Mini-Budget 2022: Changes to Income Tax Rates

Mini-Budget 2022: Changes to Income Tax Rates

Posted on: October 4th 2022 · read

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Following pressure from members of his own party, the Chancellor has made a dramatic U-turn on the abolition of the additional rate band for income tax purposes, which he had previously announced a week ago.

The additional rate of income tax, being 45% for savings or non-savings income and 38.1% for dividend income, will remain in place from 6 April 2023.

We still expect that the 1% decrease in basic rate income tax will come into effect on 6 April 2023; in addition, the reduction of 1.25% on the rates of dividend income will also still come into effect on 6 April 2023.

The National Insurance increase of 1.25% which was brought in by Rishi Sunak on 6 April 2022, will be reversed effective from 6 November 2022.

With all this uncertainty around the economy and tax rates, it is more important than ever for owner-managed business owners to review their strategy for drawing income from their business to ensure that they are in the best possible position.

Get in touch

For further guidance on any of the tax measures discussed in this article, please contact your usual MHA advisor or Contact Us.

Read the latest tax commentary – visit our dedicated hub where we will be providing resources, advice and practical guidance on what these emergency tax measures mean for you and your business, to help you prepare and manage their impact.

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