As a self-employed professional or business owner, you’re probably well aware that the new Tax Year has already started on April 6th. The Spring Budget announcement from the Chancellor last month had a lot of important information that could affect you and your business. But, there’s good news as well. The UK is expected to avoid a technical recession in 2023, which is a positive sign for small businesses.
However, it’s crucial to stay on top of any changes and understand your tax liabilities to manage your cash flow throughout the year.
At Monx, we understand the importance of being informed about changes that may affect your business. Therefore, we have compiled a guide for you to use during the New Tax Year. If you have any questions, don’t hesitate to reach out to our expert accountants.
Here are some significant changes that may impact you:
Corporation Tax
The main rate of corporation tax is increasing to 25% from April 1st, 2023. However, this only applies to companies with profits of £250,000 or more. Companies with profits of £50,000 or less will still pay corporation tax at 19%, and companies with profits between £50,001 and £249,999 will pay a marginal rate of 26.5%. This applies to associated companies as well.
Additional Rate Tax Threshold
The additional rate tax threshold is reducing from £150,000 to £125,140, meaning individuals with a total taxable income of £125,140 or more will pay income tax at the highest rate. The personal allowance, basic rate tax band, and tax rates remain unchanged and are fixed until April 2028.
Dividend Tax Free Allowance
The dividend tax-free allowance is reducing to £1,000 effective from April 6th, 2023, and further to £500 from April 6th, 2024.
Pension Annual Allowance
Pension annual allowance is increasing from £40,000 to £60,000, and the lifetime allowance is being removed.
Tax-Free Capital Gains
The tax-free capital gains allowance is reducing from £12,300 to £6,000 effective from April 6th, 2023, and further to £3,000 from April 6th, 2024.
New Tax Year, New Accountant
If you’re not already using Monx accounting, now is the time to consider switching. We have an efficient switching process where we take care of everything for you, ensuring a smooth transition to Monx. Simply get in touch with our New Business team at hello@monx.team, or WhatsApp us and we’ll take care of the rest.
We wish you a prosperous New Tax Year from all at Monx.
