UK Tax Rates and Thresholds for year 2022-23 and 2023-24
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UK Tax rates and Tables 2022/23 & 2023/24
UK tax rates are continuously afloat and different tax rates apply to different type of taxes. UK tax rates change each year and this can be very confusing.
We have summarised a tax guide so you can find UK Tax Rates and Thresholds for year 2022-23 and 2023-24.
Let’s begin!
- UK Personal Allowances
- Income Tax Rates and thresholds
- Dividend tax rate
- Corporation Tax Rate for Companies
- Saving rates and tax allowances
- National Insurance Rates
What are UK personal allowances for year 2023-24?
Personal allowances are a tax-free allowance available to each taxpayer in the UK.
This is the tax-free amount, and no income tax is payable on this rate. Whether you are self-employed, working under PAYE or have other sources of earnings, personal allowances are available.
Personal Tax Allowances:
| 2022-23 |
2023-24 |
| £12,570 |
£12,570 |
Personal Allowance and High Earners
Personal allowance is reduced by £1 for every £2 earned above annual income of £100,000.
Personal allowance is clawed back for high earners above £120,000.
2. Income Tax Rates and Thresholds 2023-24
| Band |
Taxable income |
Tax rate |
| Personal Allowance |
Up to £12,570 |
0% |
| Basic rate |
£12,571 to £50,270 |
20% |
| Higher rate |
£50,271 to £125,140 |
40% |
| Additional rate |
over £125,140 |
45% |
For Example:
Paul has annual earning of £140,000, what income tax will he pay?
The calculation is as below:
Paul will be paying £44,173.95 as income tax.
(Note: National insurance and pensions are ignored for this calculation)
2. Income Tax Rates in Scotland
Scottish tax rates are different, we have summarised Scottish tax rates for the year 2023-24 below:
| Band |
Taxable income |
Tax rate |
| Personal Allowance |
Up to £12,570 |
0% |
| Starter Rate |
£12,571 to £14,732 |
19% |
| Basic Rate |
£14,733 to £25,688 |
20% |
| Intermediate Rate |
£25,689 to £43,662 |
21% |
| Higher rate |
£43,663 to £125,140 |
42% |
| Top Rate |
over £125,140 |
47% |
Find more
From our example above:
If Paul is employed in Scotland earning £140,000 what Scottish tax would he pay?
First £12,570 will be exempt from tax because of personal allowance
£2,161 will be taxed at starter rate of 19%
£10,955 will be taxed at 20%
£17,974 will be taxed at 21%
£81,477 will be taxed at 42%
£14,859 will be taxed at 47%
Total tax payable would be £47,580.20
3. Dividend Rates
Dividend is an income that a shareholder receives when the company issues dividends to its shareholders.
Income from foreign dividends as well as income from UK dividends is taxable in the UK.
UK dividends are taxed at following rates:
| Band |
Taxable income |
Tax rate |
| Personal Allowance |
Up to £12,570 |
0% |
| Basic rate |
£12,571 to £50,270 |
8.75% |
| Higher rate |
£50,271 to £125,140 |
33.75% |
| Additional rate |
over £125,140 |
39.35% |
Dividend Allowance:
Dividend allowance is a tax free allowance.
- 2023-24 2022-23
- £1,000 £2,000
Example:
You are earning 46,000 salary from employment and received a dividend of £7,000. What will be your income tax:
Tax for first £12,570 will be zero
£33, 430 will be taxed at basic rate of 20%
£1,000 dividends will be covered by dividend allowance.
£3,720 will be taxed at 8.75%
£2,730 will be taxed at higher rate of 33.75%
Total tax payable would be £7,893.50
4. Corporation Tax Rates UK
Corporation tax rates in the UK are changed with effect from 1 April 2023.
The main rate for corporation tax was increased from 19% previously to 25%.
Small companies rate of 19% is available for small companies with profit of up to £50,000.
| Band |
Profits |
Tax rate |
| Small company rate |
£50,000 |
19% |
| Marginal Relief available |
£50,001 – £250,000 |
25% |
| Standard Rate |
£250,000 and above |
25% |
Marginal relief:
Marginal relief is available for profits between £50,000 and £250,000.
Marginal fraction is 3/200 and acts as a reducer to reduce corporation tax.
This relief allows a gradual taxation of profits to allow small companies tax saving opportunity.
Marginal Fraction
3/200
Find more
Ring Fence Companies
Ring Fence Companies:
The companies that make profits with oil extraction or oil rights are known as ring fence companies.
Corporation tax rates for ring fenced companies are 19% and 30%.
Corporation tax rates for small ring fence companies with profits of less than £50,000 is 19%.
Main rate is 30% for ring fenced companies.
Marginal Relief is available between:
£300,000 to 1.5 million Before 31 March 2023
£50,000 and £250,000 From 1 April 2023
| Rate |
Limits |
2023 |
2015 – 2022 |
| Small ring fence profit rate |
profits less than £50,000 |
19% |
|
| Main ring fence profit rate |
profits over £250,000 |
30% |
|
| Small ring fence profit rate |
profits less than £300,000 |
|
19% |
| Main ring fence profit rate |
profits over £1,500,000 |
|
30% |
| Ring Fence Fraction |
|
11/400 |
11/400 |
| Ring Fence Fraction limits |
|
50,001 – £250,000 |
300,000 – 1.5 million |
Find more
For Example
What corporation tax would Allan Construction Ltd pay if their profits are £450,000:
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The companies that make profits with oil extraction or oil rights are known as ring fence companies.
Effective rate of tax is 26.25% for marginal rate companies.
National Insurance rates 2023-24
What is nation insurance contributions (NIC);
It’s a contribution normally paid by employees, self employed workers and employers on different rates.
National insurance contributions contribute towards state pension and some other benefits.
Self Employed Tax and National insurance Rates
| Profit Range |
Comments |
2023/24
Annual Threshold |
2022/23
Annual Threshold |
| No NIC |
No NIC payable , but voluntary NIC contributions can be made |
£0 – £6,724 |
£0 – £6,724 |
| Small Profit Threshold (SPT) |
No class 2 NIC is payable between SPT and LPT but notional credits are available. |
£6,725 |
£6,725 |
| Lower Profit Threshold (LPT) |
NIC payable at
£3.45 2023-24
£3.15 2022-23 |
£12,570 |
£11,909 |
| Lower Profit Limit (LPL) |
Applies to Class 4 NIC at rates:
2022-23 9.73%
2023-24 9% |
£12,570 |
£11,909 |
| Upper Profit Limit (UPL) |
Class 4 NIC for higher profit
2023-24 2%
2022-23 2.73% |
£50,270 |
£50,270 |
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