Chancellor Jeremy Hunt delivered his Autumn Statement on 17 November 2022, setting out proposals to address a £55bn gap in the UK’s finances, with half of that amount being raised through increased taxation.
Personal taxes
Reduction to the additional rate band threshold
The additional rate threshold for income tax will reduce from £150 000 to £125 140 with effect from 6 April 2023 (Autumn Statement 2022 paras 2.7 5.20).
The new threshold is £125 140 because the personal allowance is abated where the individual’s taxable income is between £100 000 and £125 140 (i.e. £100 000 plus (£12 570 x 2)). Had the new additional rate threshold been £125 000 this would have led to an effective marginal tax rate of 67.5% for income between £125 000 and £125 140 due to the withdrawal of the personal allowance and the 45% tax rate.
This change affects the taxable...
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Chancellor Jeremy Hunt delivered his Autumn Statement on 17 November 2022, setting out proposals to address a £55bn gap in the UK’s finances, with half of that amount being raised through increased taxation.
Personal taxes
Reduction to the additional rate band threshold
The additional rate threshold for income tax will reduce from £150 000 to £125 140 with effect from 6 April 2023 (Autumn Statement 2022 paras 2.7 5.20).
The new threshold is £125 140 because the personal allowance is abated where the individual’s taxable income is between £100 000 and £125 140 (i.e. £100 000 plus (£12 570 x 2)). Had the new additional rate threshold been £125 000 this would have led to an effective marginal tax rate of 67.5% for income between £125 000 and £125 140 due to the withdrawal of the personal allowance and the 45% tax rate.
This change affects the taxable...
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If you do not subscribe but are a registered user, please enter your details in the following boxes:
