Tax year 2023/24 update

The new tax year starts on the 6^th of April 2023. See below an update on the key changes regarding workplace pensions and payroll:

Annual Allowance

It was announced on the 15^th of March, that the annual allowance will increase from £40,000 to £60,000 from April 2023.

The annual allowance is the maximum amount of pension contributions that can be paid tax-free. If you haven’t used all your annual allowance in a given year, you can carry it forward for 3 tax years in certain circumstances.

The Tapered Annual allowance will also be increased from £240,000 to £260,000. The tapered allowance means that for every £2 your adjusted income goes over £240,000, your annual allowance for the current tax year reduces by £1 down to a minimum of £4,000.

From April 2023, the adjusted income level will increase to £260,000 and the minimum annual allowance that you can be tapered to will increase to £10,000.

Lifetime Allowance

The lifetime allowance, which is the maximum amount of tax-free pension contributions that can be saved during your lifetime, is set to be abolished from April 2024. The lifetime allowance is currently £1,073,100. Until April 2024, the lifetime allowance charge will be removed so no one will incur the charge. This will happen from 6^th of April 2023.

Income tax rates

The threshold for the highest earners will fall from £150,000 to £125,140 in April 2023. The other thresholds and income tax levels will stay the same:

• Personal allowance (0%): £12,570 (staying the same)
• Basic rate (20%): £12,570 to £50,270 (staying the same)
• Higher rate (40%):  £50,270 to £125,140 (changing from £150,000 to £125,140)
• Additional rate (45%): Over £125,140

Minimum wage

National Minimum Wage will increase from £9.50 to £10.42 this tax year.

The new rates will be:

• National Living Wage (23 and over): £10.42 (increase from £9.50)
• 21-22: £10.18 (increase from £9.18)
• 18-20: £7.49 (increase from £6.83)
• Under 18: £5.28 (increase from £4.81)

Keep up to date with Husky

With Husky you don’t need to worry about any of the changes as we will manage your workplace pension and Salary Exchange schemes on your behalf, ensuring you are always up to date with any legislation changes.

If you are an employer, let Husky manage your pension so that you can focus on your business.

Book a call with our team to see how we can help.