Growth Plan 2022: Eye-catching announcements for private clients

Matthew Radcliffe

Income tax

Perhaps the most eye-catching tax cut announced by the chancellor from a private client standpoint was the change to the additional rate of income tax currently 45% on income over £150 000. This will be scrapped completely from April 2023 leaving a single higher rate of income tax of 40% affecting around 660 000 individuals. To put that in context France Japan and Germany all have top rates of 45% whilst Italy has 43% and out of all G7 countries only the US and Canada will have lower top rates then the UK.

Additional rate payers will further benefit from the abolition of the additional rate of dividend tax. The 38.1% rate will be removed to align with the dividend upper rate which is being reduced to 32.5% from 6 April 2023.

The chancellor announced no detail on how the removal of...

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