Allowances & Thresholds

Allowances & Thresholds

Allowances & Thresholds

Reminder - Allowances & Thresholds

Part 1

Individuals should ensure when completing their Self Assessment Deadline that they are aware of the many allowances available for the tax 22-23 and 23-24 as well as be aware of other thresholds to ensure not paying or having deductions higher than normal

Personal allowance £12,570 (22-23: £12,570)

  • Please note this starts to reduce if the total Gross Income from all sources exceeds £100,000
  • Personal allowance will reduce by £1 for every £2 above £100,000
  • Gross Income above £125,140 will mean £0 Personal Allowance

Higher Child Benefit Charge

Up to £50,000 each for a married couple or a couple with children can claim the full child benefit

£50,000 - £60,000 Child Benefit is restricted but the whole amount will not have to be returned but 1% for every £100 over £50,000

Above £60,000 whoever earns above this will have to fully return the child benefit and advised to cancel any future child benefit claims

  • Please note that the higher child benefit charge will have to be returned through a Self Assessment Tax Return and completed each year if claimed for the following year where it was also claimed

Savings Allowance 22/23 & 23/24

£1,000 for basic rate tax payer

£500 for higher rate tax payer

£0 for additional rate tax payer

Dividends Allowance £1,000 (22-23 £500)

Then any excess Dividends will be subject to tax rate

Basic rate tax payer 8.75%

Higher rates tax payer 33.75%

Additional rate tax payer 39.35%

Tax Relief

Private pension contributions and and Gift Aid charity contributions provide Tax relief by increasing the Basic Rate Band so more income is taxable at Basic Rate

Self Employed

Class 2 only due if income is above £12,570 (22-23. £11,908)

Voluntary Class 2 if below £6,725 (22-23 £6,725)

Class 2 payable £3.45 (22-23 £3.15 per week)

Class 4 at 9% between £12,570 - £50,270 with higher rate at 2% (22-23 Above £11,908)

Reminder - Allowances & Thresholds

Part 2


Class 1 National Employer at 13.8% £9,096

Class 1 National Employee at 12% £12,570 up to higher rate than 2% In the higher rate

Please note Personal Allowance can only

Be claimed once, however, National Insurance is provided per each job

Director on the payroll can have National Insurance deduction as normal or only account once reach above the National Insurance threshold

Capitals Gain exemption £6,000 (22-23 £12,300)

Rates will depend on the type of asset where there has been a gain on

@Mamuna Farooq is a specialist in this area

Inheritance tax exemption £325,000 (22-23 £325,000)

If main resident then an additional £175,000 so total exemption £500,000 each person in a married couple

If one spouse dies then tax free £325,000 can be transferred to the living spouse so £650,000 exemption

Anything above exemption subject to 40% tax

ISA Allowance £20,000 (22-23 £20,000)

Any interest earned on this account will be tax free


Blind personal allowance

Personal independent payment

Disability living allowance

Carers allowance for looking after some which is taxable if have other sources of income combined above the personal allowance

Attendance allowance tax free for those entitled who are unable to work due to physical condition

Please feel to reach out to us or our associate Mamuna Farooq to discuss further in regards to your tax affairs and the allowances/exemptions

Tel: 01212852534


#accountants #taxes #bookkeeping #vat #paye #selfassessment #corporationtax #accounts #companies

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