Income tax

Income tax rates

The government had previously announced that there would be a cut in the basic rate of income tax, from 20% to 19%, from April 2024. This was to be accelerated so that it took effect from April 2023. However, whilst the government aims to proceed with the cut in due course, this will only take place when economic conditions allow and a change is affordable. The basic rate of income tax will therefore remain at 20% indefinitely

At the Mini Budget on 23 September the government announced a plan to abolish the 45% additional rate of income tax from April 2023. However, it was announced on 3 October that the government would not proceed with the abolition of the 45p tax rate.

Dividends

The government has also confirmed that, from April 2023, the 1.25% proposed reduction in rates of taxation will not proceed, meaning that the rates will stay as follows:

  • the dividend ordinary rate - 8.75%
  • the dividend upper rate - 33.75%
  • the dividend additional rate - 39.35%.

As corporation tax due on directors' overdrawn loan accounts is paid at the dividend upper rate, this will also remain at 33.75%.

These changes will apply in Scotland and Wales as the rules on dividends apply to the whole of the UK.

About us

Cheshams Accountants, Accountants in Hounslow was established in 2003 and today, we continue to build on our enviable reputation for providing excellent advice and first class service to our business and personal clients alike. We have many clients in the local community and service businesses, small and large.

Contact details

0208 572 9955

Cheshams Accountants Ltd, Suite 16, Neals Corner, 2 Bath Road, Hounslow, Middlesex TW3 3HJ

Registered in England and Wales.
Company registration number: 04832946
Incorporated: 1 July 2003

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