The cut in the basic rate of income tax from 20% to 19% has been brought forward by one year to 2023/24 and will apply to non-dividend income.
The 45% and 39.35% ‘additional rates’ of income tax that apply to income over £150,000 will be abolished from 6 April 2023.
This will mean that, in 2023/24, there will be just two rates of tax on general income – 19% and 40%, with two dividend income tax rates of 7.5% and 32.5%.
Further, those who would have otherwise been additional rate taxpayers will, from 6 April 2023, benefit from a Personal Savings Allowance of £500, in line with higher rate taxpayers. This was not previously available to them. Savings income within the Allowance is taxed at 0%.