1. Personal Allowance
The standard Personal Allowance is £12,570 in 2022/23 tax year, which is the amount of income you do not have to pay tax on. The government is currently expecting to keep the same personal allowance of £12,570 until April 2026.
Tax Rates
The table shows the tax rates you pay in each band if you have a standard Personal Allowance of £12,570.
2023/24 Income tax in England, Wales, and Northern Ireland
2023/24 Income tax in Scotland
2. Dividend Allowance
The dividend allowance is changing, with the current £2,000 threshold reducing in April 2023, and then again in April 2024. This means that you’ll pay tax on more of your dividend income. The dividend allowance for each year is:
- 2022/23 tax year – £2,000
- 2023/24 tax year – £1,000
- 2024/25 tax year – £500
You can use the dividend allowance as well as your personal tax allowance. In the 2023/24 tax year you could potentially earn a salary of £12,570, plus receive a dividend of £1,000, without incurring tax or National Insurance.
Tax Rates
The rate of dividend tax that you pay depends on which rate of income tax you pay. Here is a breakdown of dividends tax rates –
3. Capital Gain Allowance
The annual exempt amount (also known as the AEA) is changing, the current £12,300 threshold is reducing in April 23 and then again in the following 2 years. This means that you’ll pay tax on more of your CG income. The CG allowance for each year is the following for individuals:
- 2022/23 tax year – £12,300
- 2023/24 tax year – £6,000
- 2024/25 tax year – £3.000
Tax Rates
The rate of Capital Gains Tax that you pay depends on what the gain results from (in other words, what you disposed of), and what rate of income tax you pay. Here is a breakdown of CGT rates –
Lower Rate Taxpayer
Higher Rate Taxpayer
