On Friday 23rd September, the government announced sweeping tax plans that will affect the Food and Drink and Hospitality industries.
The dividend tax rate is being cut from April 2023
Dividend tax rates were increased by 1.25% in April 2022.Currently, basic-rate payers pay 8.75% on dividends, higher-rate payers 33.75% and top-rate payers – those who earn more than £150,000 a year – pay dividend tax at 39.35pc.
All these rates will fall by 1.25 percentage points from April 2023
The annual savings should be as follows:
£10,000 of dividends, £100 of savings
£20,000 of dividends, £225 of savings
£30,000 of dividends, £350 of savings
£50,000 of dividends, £600 of savings
Income tax will be cut:
Income tax on earnings from £12,571 to £50,270 will be cut from 20p to 19p in the pound from April 2023
Income tax of 45p in the pound for earnings over £150,00, will be cut to 45p in the pound from April 2023
National insurance will be cut from November 2022
For Employers, this means:
Broadly speaking, employers currently pay 15.05% on top of an employee’s salary as part of its PAYE bill
This will be cut to 13.8% from November 2022
For employees, this means:
The 1.25% rise in national insurance contributions paid by employees that was brought in in April 2022, will be reversed.
This calculator can tell an employee how much exactly they’ll save: https://www.telegraph.co.uk/tax/news/national-insurance-calculator-work-how-much-will-pay/
The Annual Investment allowance was previously increased temporarily from £200,000 to £1,000,000. It is now set permanently at one million pounds.
Alcohol duty is frozen for one year from 1st February 2023