2022/23 tax year: New tax rates and allowances explained

Your personal tax allowance is the amount of money you can earn, or income you can receive, without paying tax. In the tax year 2022/23 it’s £12,570 – the same as it was in the 2021/22 tax year. This means if you earn or receive less than £12,570 between 6 April 2022 and 5 April 2023, you won’t have to pay any tax.

Your income could include rental income, wages or earnings from freelance work, interest from savings and/or dividends from shares or investment funds you own.

Not all the money you receive is taxable. So that means you could receive more than £12,570 a year and still not pay tax.

Here’s a list of income that you could have to pay tax on:

Your wages if you’re employed, or profits from being self employedInterest from savings accounts, over a certain amountDividends from shares, over a certain amount (a dividend is a share of the profit that a company makes)Pension payments, including your state pensionCertain state benefits, including Jobseeker’s Allowance and Carer’s Allowance.

Once you earn more than £100,000, you start to lose the personal allowance. You lose it at a rate of £1 for every £2 you earn above the £100,000 threshold. This means if you earn £110,000 a year you get a personal allowance of £7,500 a year.

If you earn £120,000 a year, you get a personal allowance of £2,500 a year. And once you earn over £125,000 a year, you don’t get the personal allowance at all.

Author: wpadmin

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