It's been said for many years that the Tory's like to make the rich even richer....well, it's happening once again!
Here's how our tax bands are right now:
From April 2023 this is what's happening:
The rich (those who earn over £150,000) will no longer pay the 45% additional rate of tax, they will instead pay the 40% on earning over £50,270. They will benefit from a 5% tax cut on the earnings over this threshold saving them THOUSANDS in tax per year.
But what about low and average earners...well, we each benefit from a reduction in the basic rate tax by a whole 1%. This saves us around £330 per year, and to add insult to injury, the rich will also benefit from this deduction! That means they can splash out on that extra bottle of Prosecco at the Ritz!
This news isn't exactly new news. This was Rishi Sunak's plan for 2024 which has been brought forward a year.
The change to the main rates will apply to:
non-savings, non-dividend income for taxpayers in England, Wales and Northern Ireland
the savings rates applicable to savings income for taxpayers across the UK
the default additional rate applicable to non-savings and non-dividend income of any taxpayer not
There are some silver lined clouds for Charities though, Gift Aid relief will have a 4 year transition period and the income tax relief will remain at 20% until April 2027.
Relief at source pensions will also have a transition period of 1 year, which will allow them to reclaim the tax relief at 20%.
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