Now we’re part way through the first month of 2023, it’s time to start looking forward and planning for your upcoming tax deadlines.
With so many dates to add to the calendar, it’s important to be aware of your liabilities for 2023, when you need to pay, and what’s changing in the coming months.
Here are the personal tax changes and deadlines you need to know about.
The first major deadline of the year is your 2021/22 self-assessment tax return, due by midnight on 31 January 2023.
According to figures released by HMRC, 5.7 million taxpayers still hadn’t submitted their self-assessment as of 3 January. With the deadline a matter of days away, you must file your return as soon as possible if you’re yet to do so. Failure to meet the deadline will result in late payment penalties.
Payments are also due on this deadline. For people who make payments on account, this means the first payment towards your bill for the current tax year (2022/23) must reach HMRC by 31 January, alongside your balancing payment for last year (2021/22). Your second payment on account for 2022/23 will follow in July.
Your 2022/23 self-assessment won’t be due until 31 January 2024 unless you send it by post, in which case it must reach HMRC by 31 October 2023.
It’s always best to get ahead when you can, and our self-assessment experts can help you do just that.
Income tax changes
From the start of the new tax year, there will be a number of tax threshold cuts coming into force.
The Scottish Government has announced that it will maintain the starter and basic, and intermediate tax rates. The higher and top rates of tax will increase by 1p to 42p and 47p, respectively.
One of the most significant will be the top rate tax band threshold decrease. From 6 April, the additional rate threshold will be cut from £150,000 a year to £125,140.
The Scottish Fiscal Commission has forecast that Income Tax will raise £15,810 million in 2023-24 in Scotland.
Capital gains tax and dividend tax
As we mentioned, several changes to personal tax thresholds were announced towards the end of last year. Capital gains tax (CGT) will undergo some changes over the next year, starting in April 2023.
The CGT annual exemption allowance (AEA) will be slashed from £12,300 a year to £6,000 from 6 April and £3,000 for most trustees. As of 2024, this will drop again to £3,000 and £1,500, respectively.
The UK Government will also be abolishing the annual uprating of the AEA with CPI and fixing the CGT reporting limit at £50,000.
From April, the dividend allowance will also drop from £2,000 to £1,000 a year. Much like the AEA, this allowance will be halved again – to £500 in April 2024.
The rates of dividend tax will remain the same at:
- 8.75% – basic rate
- 33.75% – higher rate
- 39.35% – additional rate.
Our personal tax planning team is always available to help you calculate your CGT tax bill, so you stay compliant with HMRC.
Land and buildings transaction tax
As part of the Scottish Budget, the Government announced that the rate of additional dwelling supplement (ADS) would increase to 6%, raising additional revenue while supporting first-time buyers.
The revised rate will apply to contracts entered into on or after 16 December 2022. For contracts entered into on or before 15 December, the previous rate of 4% will apply.
The residential tax bands for land and buildings transaction tax (LBTT) will remain unchanged for the coming tax year.
We’ll keep you in the loop
With a number of tax changes and deadlines to remember over the coming months, it’s essential to mark everything in your diaries, so you don’t end up under or overpaying your taxes or missing your deadlines altogether.
We can help you manage your obligations to HMRC and ensure everything is paid correctly and on time.
Talk to our tax planning experts today to get ahead of 2023.