020 8876 1097 office@blythetax.com
Budget Comment March 2023

In line with recent updates this is a brief Budget comment with mention of a few other topics:

  • Budget Headlines
  • Making Tax Digital
  • Re-Basing
  • Government Gateway
  • Pensions Again
  • Reporting UK Property Capital Gains
Budget Headlines
  • As previously announced: Corporation Tax rises to 25% from 1 April 2023 for profits greater than £250,000; small businesses with profit of £50,000 or less continue to pay the current 19% with a sliding scale in between.
  • The Pension Lifetime Allowance of £1,073,100 has been abolished (see comment below)
  • The Pension Annual Allowance of £40,000 increases to £60,000 from 6 April 2023
  • The Pension Tapered Annual Allowance income level of £240,000 increases to £260,000 from 6 April 2023.
  • The Pension fully tapered Annual Allowance increases from £4,000 to £10,000.
  • As previously announced the Capital Gains Tax Annual Exemption is down from £12,300 to £6,000 from 6 April 2023 and then to £3,000 from 6 April 2024
  • Capital expenditure for companies will be 100% deductible from 1 April 2023. Little impact to our clients here as the Annual Investment Allowance of £1,000,000 remains available.
  • National Insurance was increased by 1.25% from April 2022 (to fund the Health and Social Care Levy). In a move to capture a similar increase from those paying themselves with dividends, the Dividend Tax rates (7.5%, 32.5% and 38.1%) all increased by 1.25% at the same time – as previously announced.
  • From 1 April 2022 significant changes to late payment and late submission penalties (these won’t affect you if you do everything on time!)
Making Tax Digital (MTD)

Last year we noted: ‘there’s a revolution on its way (slowly!). First announced in the April 2015 Budget, ‘MTD’ will really hit home from April 2024’. Well it has been put back again – this time to April 2026!

Re-Basing hasn’t been delayed (if you are Self Employed, see below for what we said last year).

Up to now the MTD impact has only been felt by VAT registered businesses and it hasn’t been that big an impact. All of these businesses were reporting quarterly already – so not a big deal to report it in a slightly different way!

From April 2026, many Self Employed and property landlords will have to transition from doing one Tax Return a year to 5 (five!). I’ve said before that there is a revolution on the way and this is what I mean.

The timing has been significantly delayed. So far it has happened for all VAT registered businesses.

And the scale has been reduced. At present, Self Employed and Landlords with income above £50,000 will be required to follow MTD rules from April 2026. For those with income over £30,000 it will be from April 2027. Previously it was intended that anyone with income over £10,000 had to comply! Further details to follow…


No change here. For the Self Employed with an Accounting Date other than 31 March (or 5 April) the big talking point is the re-basing of the accounting year to 31 March. This involves a ‘Transitional Year’ (ending 5 April 2024) with a longer accounting period but with the deduction of Overlap Relief (this is the technical term for profits that were taxed twice back in 1997).

So for a Self Employment with an Accounting Date of 30 April, this means the following accounting periods:

In the year to 5 April 2022 – normal to 30/4/21
In the year to 5 April 2023 – normal to 30/4/22
In the year to 5 April 2024 – transition: 1/5/22 to 31/3/24 less Overlap Relief
In the year to 5 April 2025 – new normal to 31/3/25 with quarterly reporting
In the year to 5 April 2026 – new normal to 31/3/26 with quarterly reporting

The message for a thriving business is to watch out for the tax payable on 31 January 2025!

Government Gateway

You may have heard the expression ‘Government Gateway’. It is becoming more and more a feature of everyday life and essential for Making Tax Digital! If you haven’t registered then we recommend that you do so – it’s good to be prepared!

Follow the link here: www.gov.uk/personal-tax-account/sign-in/prove-identity

Just to be clear, we deal with your Self Assessment (and where applicable) Company Corporation Tax through our own Agent Government Gateway but we cannot set up your individual Gateway. There are a number of areas for which it is required. For example:

  • Reporting UK residential property sales (see above!)
  • Applying for time to pay your tax liability
  • Accessing your Personal Tax Account
  • Submitting Making Tax Digital VAT Returns
  • Submitting Making Tax Digital Rental Income Returns (to follow)
  • Applying for your State Pension forecast

This is an increasingly complex area for which we recommend specialist advice but here are a few things to look out for if you have a high value ‘pot’.

Note the changes shown above in the Budget – so let’s tuck in! Not so fast… Labour have already announced that they would reverse the abolition of the Lifetime Allowance (LTA). Subject to the specialist advice mentioned, if your pension pot is £1,000,000 or more, we’d be inclined not to contribute because:

  • Labour have pledged to bring the LTA back (we don’t know how or to what extent)
  • If you contribute and you have ‘protection’ in place – you would lose that ‘protection’ if labour reintroduce the LTA
  • Additional contributions would not enjoy the 25% tax free cash (one of the main reasons for contributing) – this is because, whilst removing the LTA, they introduced a cap on tax free cash!
Reporting UK Property Capital Gains

For all UK residential property sales since 5 April 2020, where tax is due, you must submit a Capital Gains Tax Return within 60 days of the completion – the estimated Capital Gains Tax (CGT) is due at the same time. Penalties and interest will be charged on late submissions. We say ‘estimated’ because CGT rates depend on your level of income and you may subsequently realise a loss that can be offset.

It is clear that many Solicitors don’t consider it to be their responsibility to point out this obligation so please inform us immediately on sale if you are unsure whether your Solicitor is dealing with the Return…

The sale will also still form part of your Self Assessment Tax Return for the year in question.

The comments above are brief highlights and each item is subject to change, please note the full chart of Rates and Allowances below and remember – there is always more to it than meets the eye so please contact us before taking or refraining from action.

Rates and Allowances for 2023 and 2024

Rates and allowances for Income Tax, Corporation Tax, Capital Gains Tax, and Inheritance Tax are set out below.


2022-23 (£) 2023-24 (£) Increase (£)
Income Tax allowances
Personal allowance
Personal allowance (age 65-74)
Personal allowance  (age 75 and over)
Income limit for under 65 personal allowance
Income limit for age-related allowances
Married couple’s allowance for people born before 6 April 1935
Minimum amount of married couple’s allowance
Blind person’s allowance
Capital Gains Tax annual exempt amount:
Individuals etc.
Main Rate
Lower Rate
Main Rate (for gains on residential property)
Lower Rate (for gains on residential property)



Inheritance Tax
Nil rate band limit
Residence nil rate band limit
Main Rate




Taxable bands 2022-23 (£) Taxable bands 2023-24 (£)
Starting rate 10% Starting rate 10%
Basic rate 20% 0 – 37,700 Basic rate 20% 0 – 37,700
Higher rate 40% 37,701 – 150,000 Higher rate 40% 37,701 – 125,401
Additional rate 45% Over 150,000 Additional rate 45% Over 125,401


Income tax rates
Tax year 2022-23 Tax year 2023-24
Basic rate 20% 20%
Higher rate 40% 40%
Additional rate 45% 45%
Dividend ordinary rate – for dividends otherwise taxable at the basic rate
(effective rate with tax credit)
 8.5% 8.5%
Dividend upper rate – for dividends otherwise taxable at the higher rate
(effective rate with tax credit)
 33.75% 33.75%
Dividend additional rate – for dividends otherwise taxable at the additional rate
(effective rate with tax credit)
39.35% 39.35%
Dividend allowance
From April 2016, the new Dividend Allowance means that individuals will not have to pay tax on the first £5,000 of dividend income they receive.
£2,000 £1,000

Personal savings allowance
From April 2016, the new Personal Savings Allowance means that basic rate taxpayers will not have to pay tax on the first £1,000 of savings income they receive.


Higher rate taxpayers will not have tax to pay on their first £500 of savings income.









Starting rate for savings    
  Tax year 2022-23 Tax year 2023-24
Starting rate for savings 0% 0%
Starting rate limit for savings £5,000 £5,000
Corporation Tax Profits
Tax year 2022-23 Tax year 2023-24
Main rate 19% 25%
Small profits rate N/A 19%
Lower threshold N/A £50,000
Upper threshold N/A £250,000
Marginal relief N/A 3/200ths
National Insurance

Tax Year 2022/2023

Tax Year 2023/2024

 Class 1 Employees (Primary)
On first (pw) 242 Nil 242 Nil
Between (pw)
242-967 12% 242-967 12%
Over (pw)
967 2% 967 2%
 Class 1 Employers (Secondary)
On first (pw) 175 Nil 175 Nil
Over (pw) 175 13.8% 175 13.8%
Employers’ contracted-out rebate, salary related schemes N/A N/A
Employers’ contracted-out rebate, money purchase schemes Abolished Abolished
Class 2 Self employed
Above Lower Profits Threshold (pw) 3.15 3.45
Small Profits Threshold (pa) 6,725 6,725
Lower Profits Threshold (pa) 11,908 12,570
Special Class 2 rate for share fisherman (pw) 3.80 4.10
Special Class 2 rate for volunteer development workers (pw) 6.15 6.15
Class 3 Voluntary
 Flat rate (pw) 15.85 17.45
Class 4 Self employed
On profits between (pa) 11,908 – 50,270 9.73% 12,570-50,270 9%
above 50,270 2.73% above 50,270 2%
Stamp Taxes – Rates
Transfers of property (consideration paid)


Rate All land in the UK Rate All land in the UK
Non-Residential Additional residential property
Zero £0-150,000 3% £0-250,000
2% On next £100,000 5% On next £675,00
5% On the rest 10% On next £575,000
12% On the rest (above) £1,500,000
The rate of stamp duty / stamp duty reserve tax on the transfer of shares and securities is unchanged at 0.5%.
Value Added Tax (VAT)
April 2022-23 April 2023-24
Standard rate 20% 20%
Reduced rate 5% 5%
Zero rate 0% 0%
Exempt n/a n/a
Value Added Tax (VAT) – Registration and Deregistration thresholds
  From April 2022 From April 2023
VAT – registration threshold 85,000 85,000
VAT – deregistration threshold 83,000 83,000