What’s your 2022-23 personal allowance?

Your Personal Allowance for the 2022-2023 tax year is £12,570.

This means that if you earn under £12,570, you don’t pay any income tax at all. And, yes, this is exactly the same Personal Allowance amount as last year.

Does the personal allowance usually go up every tax year?

Yes, traditionally, the Chancellor announces a slight increase in the Personal Allowance in the Spring Budget.

But in the March 2021 Budget, Chancellor Sunak stated that the new rate would be £12,570 for the next four tax years. That’s from April 6th 2021, until 5th April 2026.

The tax free Personal Allowance amount is the same in all four countries of the UK. And the amount you’re entitled to is reduced by £1 for every £2 you earn over £100,000. Regardless of where you live, this means that when your income hits £125,140 you pay income tax on all of it.

Are the 2022/2023 tax bands changing?

You pay income tax on anything you earn that’s over £12,570. The rate of income tax you pay depends on how much you earn in total during that tax year.

For 2022-23, the tax rates in England, Northern Ireland and Wales are:

  • Basic rate of 20% on earnings between £12,571 and £50,270
  • Higher Rate of 40% on earnings between £50,271 and £150,000
  • Additional Rate of 45% on earnings over £150,000

In Scotland, there are different tax bands and rates. For 2022-23, these are:

  • Starter Rate of 19% on income between £12,571 and £14,732
  • Basic Rate of 20% on income between £14,733 and £25,688
  • Intermediate Rate of 21% on income between £25,689 and £43,662
  • Higher Rate of 41% on income between £43,663 and £150,000
  • Top Rate of 46% on income over £150,000

What difference will this make to the 2022/2023 tax year?

Keeping the Basic Rate of income tax and the Personal Allowance Rate the same over consecutive years, means more people will find themselves paying income tax. By the end of this freeze in 2025-26, there will be 1 million more people in the Higher Rate tax band.

And 3 million more people out of the Personal Allowance and into the Basic Rate income tax band. Over time, it’s an overall loss for every level of UK taxpayer.

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