What will the 2022/23 Tax year look like for you?

With the Covid-19 virus continuing to impact our lives and with issues surrounding rising food prices and heating costs, the Universal Credit squeeze and labour shortages in certain sectors, up stepped the Chancellor of the Exchequer, Rishi Sunak, to deliver his second Budget this calendar year.

Certainly in the context of the forthcoming 2022/23 tax year and beyond, it is important to marry the Budget in March 2021 with the latest one to fully comprehend the impact upon individuals and businesses going forward.

For Business

For those businesses investing in plant and machinery, the temporary 100% Annual Investment Allowance (AIA) of £1 million was due to come to an end on 31st December 2021. This cut-off date has now been extended to 31st March 2023.

As was announced in the March Budget, the Corporation Tax (CT) rate will go up in April 2023, from 19% to 25% for companies with profits exceeding £250,000. Companies with profits of £50,000 or less will continue on the current rate of 19%. For those in between, there will effectively be a sliding scale.

If you operate within the retail, hospitality, and leisure sectors in England, there is a 50% business rate discount for the 2022-23 tax year, up to a maximum of £110,000.

For Individuals

The Income Tax personal allowance for individuals will remain at £12,570 until April 2026. The same will apply to the basic rate band (in England and Northern Ireland). The Scottish and Welsh Parliaments will have the right to set their own.

The Inheritance Tax exemption of £325,000 and the Capital Gains Tax annual exemption of £12,300 will stay as they are until April 2026.

From 27th October 2021, if you make taxable gains on the sale of a second residential property, you now have 60 days in which to complete a Capital Gains Tax Return and make the tax payment before penalties and interest kick in. Prior to this, it was only 30 days.

For those on Universal Credit who are working, from no later than 1st December 2021 you will be able to take home more of your hard-earned cash as the taper percentage is being reduced from 66% to 55%.

There are lots of opportunities and issues to consider following this Budget for businesses, individuals and families. We are here, ready to help.

GEOFF SELBY, BUSINESS DIRECTOR

For a more in-depth summary of the Budget changes and how they'll affect you, you can download our full 13-page summary. We believe it’s important to discuss all plans you are considering before taking any action. So, if you would like to see how the two 2021 Budget changes might affect you, your family and your business, why not contact us? We are a West Bridgford-based accountancy firm, supporting businesses and individuals right across the UK.