The government has announced that income tax and NIC thresholds will be frozen for two years longer than originally planned. The following is an extract from the HM Treasury document CP751, entitled Autumn Statement 2022 (para. 5.17), with paragraph spacing added for greater clarity:
“The income tax Personal Allowance (PA) and higher rate threshold (HRT), and the National Insurance contributions (NICs) Upper Earnings Limit (UEL) and Upper Profits Limit (UPL) are already fixed at their current levels until April 2026 and will now be maintained for an additional two years until April 2028.
From July 2022 the NICs Primary Threshold (PT) and Lower Profits Limit (LPL) were increased to align with the PA and will be maintained at this level from April 2023 until April 2028. The Class 2 Lower Profits Threshold (LPT) will also be fixed from April 2023 until April 2028 to align with the LPL.
The PA, PT, LPL and LPT will remain at £12,570 and the HRT, UEL and UPL will remain at £50,270.
The PA and NICs thresholds apply across the UK. The HRT for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland, and the HRT for savings and dividend income will apply UK-wide.
The government will legislate for the income tax measures in Autumn Finance Bill 2022, and NICs changes in affirmative secondary legislation in early 2023.”
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Income Tax is a substantial single-volume guide to all the income tax issues commonly faced by most accountants and tax practitioners.
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The complex rules for National Insurance contributions are covered in depth in National Insurance Contributions, by Karen Speight.
