2022 Budget Announcements

Income Tax

Personal Allowance (PA) and higher rate threshold (HRT), and the National Insurance contributions (NICs) Upper Earnings Limit (UEL) and Upper Profits Limit (UPL) are already fixed at their current levels until April 2026 and will now be maintained for an additional two years until April 2028.

National Insurance

From July 2022 the NICs Primary Threshold (PT) and Lower Profits Limit (LPL) were increased to align with the PA and will be maintained at this level from April 2023 until April 2028. The Class 2 Lower Profits Threshold (LPT) will also be fixed from April 2023 until April 2028 to align with the LPL. The PA, PT, LPL and LPT will remain at £12,570 and the HRT, UEL and UPL will remain at £50,270.

NIC Rates

The government will use the September CPI figure of 10.1% to uprate the Class 2 and Class 3 NICs rates for 2023-24. The Class 2 rate will be £3.45 per week, and the Class 3 rate will be £17.45 per week.

Inheritance Tax

The inheritance tax nil-rate bands are already set at current levels until April 2026 and will stay fixed at these levels for a further 2 years until April 2028. The nil-rate band will continue at £325,000, the residence nil-rate band will continue at £175,000, and the residence nil-rate band taper will continue to start at £2 million.

Qualifying Inheritance Estates

Qualifying estates can continue to pass on up to £500,000 and the qualifying estate of a surviving spouse or civil partner can continue to pass on up to £1 million without an inheritance tax liability.

Additional Rate

The income tax additional rate threshold (ART) will be lowered from £150,000 to £125,140 from 6 April 2023.

Dividend Allowance

The government will reduce the Dividend Allowance from £2,000 to £1,000 from April 2023, and to £500 from April 2024,

Annual Exemption

The Capital Gains Tax Annual Exempt Amount will be reduced from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024.

Married Couple’s Allowance

The government will uprate the Married Couple’s Allowance (MCA) and Blind Person’s Allowance by the September CPI figure of 10.1% for the 2023-24 tax year. The Married Couple’s Allowance will be valued at between £4,010 and £10,375 and the Blind Person’s Allowance will be valued at £2,870.

Stamp Duty Land Tax

On 23 September 2022, the government increased the nil-rate threshold of Stamp Duty Land Tax (SDLT) from £125,000 to £250,000 for all purchasers of residential property in England and Northern Ireland and increased the nil-rate threshold paid by first-time buyers from £300,000 to £425,000.

First Time Buyers

The maximum purchase price for which First Time Buyers’ Relief can be claimed was increased from £500,000 to £625,000. This will now be a temporary SDLT reduction. The SDLT cut will remain in place until 31 March 2025 to support the housing market.

Annual Tax on Enveloped Dwellings

The annual chargeable amounts for the ATED will be uplifted by the September CPI figure of 10.1% for the 2023-24 ATED charging period. This uplift is a routine change as set out in existing primary legislation.

Tax Avoidance

The government will legislate in Spring Finance Bill 2023 so that shares and securities in a non-UK company acquired in exchange for securities in a UK close company will be deemed to be located in the UK. This will have effect where an individual has a material interest in both the UK and the non-UK company and where the share exchange is carried out on or after 17 November 2022.