The additional rate threshold (ART) currently £150,000, is given at ITA 2007, s 10(5A).
Following the autumn statement 2022, HMRC have confirmed details of how the additional rate of personal income tax (45%) will apply from a lower income threshold:
“The Income Tax additional rate threshold (ART) will be lowered from £150,000 to £125,140, the income level at which an individual will not have any Personal Allowance, because £1 of the Personal Allowance is withdrawn for every £2 of income above £100,000 from 6 April 2023.”
The personal allowance (currently £12,570) is given at s. 35(1) and details of how the allowance is withdrawn are at s. 35(2). The link between the personal allowance and the ART are explained as follows:
“Legislation will be introduced in Autumn Finance Bill 2022 to set the ART at £125,140 for 2023 to 2024 until 2027 to 2028, as the Personal Allowance is set at £12,570 until 2027 to 2028. The legislative default will then be for the ART to increase in line with any future increases to the Personal Allowance.”
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