Finance Act 2022 (c. 3)

PART 1 U.K. Income tax, corporation tax and capital gains tax

Income tax charge, rates etc U.K.

1 Income tax charge for tax year 2022-23 U.K.

Income tax is charged for the tax year 2022-23.

2 Main rates of income tax for tax year 2022-23 U.K.

For the tax year 2022-23 the main rates of income tax are as follows—

(a) the basic rate is 20%,

(b) the higher rate is 40%, and

(c) the additional rate is 45%.

3 Default and savings rates of income tax for tax year 2022-23 U.K.

(1) For the tax year 2022-23 the default rates of income tax are as follows—

(a) the default basic rate is 20%,

(b) the default higher rate is 40%, and

(c) the default additional rate is 45%.

(2) For the tax year 2022-23 the savings rates of income tax are as follows—

(a) the savings basic rate is 20%,

(b) the savings higher rate is 40%, and

(c) the savings additional rate is 45%.

4 Increase in rates of tax on dividend income U.K.

(1) In section 8 of ITA 2007 (which provides, among other things, for the dividend ordinary rate, dividend upper rate and dividend additional rate)—

(a) in subsection (1) (the dividend ordinary rate), for “7.5%” substitute “8.75%”,

(b) in subsection (2) (the dividend upper rate), for “32.5%” substitute “33.75%”, and

(c) in subsection (3) (the dividend additional rate), for “38.1%” substitute “39.35%”.

(2) In section 9(2) of ITA 2007 (the dividend trust rate), for “38.1%” substitute “39.35%”.

(3) The amendments made by this section have effect for the tax year 2022-23 and subsequent tax years.

5 Freezing starting rate limit for savings for tax year 2022-23 U.K.

(1) For the tax year 2022-23 the amount specified in section 12(3) of ITA 2007 (the starting rate limit for savings) is “£5,000”.

(2) Accordingly, section 21 of that Act (indexation) does not apply in relation to the starting rate limit for savings for that tax year.