As we settle back into our routines following the festive break, there are several key factors that businesses need to be aware of and prepared for in 2023.
While we detailed the headline announcements from the Autumn budget back in November, there have been further announcements and changes in the interim, which we’ll summarise here as a checklist to ensure you are up to speed.
Changes to 2023 Tax Rates
When the new tax year begins on 6th April 2023, income tax rates, dividend allowances and capital gains exemptions will change:
The additional rate tax band will kick in at £125,140, reduced from £150,000.
Personal allowances and higher rate thresholds have been frozen until April 2028.
Dividend allowances will drop from £2,000 to £1,000 and again to £500 in April 2024.
Dividend tax rates remain static, from 8.75% to 39.35%.
Capital gains tax annual exemptions will drop from £12,300 to £6,000 and then to £3,000 in April 2024.
Business Support With Energy Costs
With steeply rising energy costs, the government has introduced the Energy Bill Relief Scheme. It will continue to subsidise wholesale utility rates, although with support available to businesses decreasing from April 2023.
From April until March 2024, commercial utility customers will receive a discount of up to £6.97 per MWh on gas bills and up to £19.61 per MWh for electricity. However, companies with lower energy prices due to fixed-rate tariffs will not be eligible.
The discounts will be applied automatically to supplier invoices, with larger subsidies for energy-intensive businesses, including manufacturers.
Qualifying companies will receive a maximum discount of £40 per MWh for gas and £89.10 for electricity.
Tax Filing Deadlines
At this stage, any self-assessment tax returns should be well underway, with all returns, including those for self-employed directors, due by 31st January 2023.
If you have yet to compile or submit your return or have not remitted any balance payable, we advise you to get in touch as quickly as possible to ensure you do not receive a fine, penalty or incur interest charges.
PAYE Updates for 2023
National Minimum Wage and National Living Wage pay rates increase from 1st April 2023 onwards, with minimum hourly wages as follows:
Employees aged 23 and above: £10.42 an hour
Employees aged 21 to 22: £10.18 an hour
Employees aged 18 to 20: £7.40 an hour
Employees aged 16 to 17: £5.28 an hour
Apprentices: £5.28 an hour
If you have yet to update your payroll system, notify employees of a change in their pay rate, or need to verify whether all staff are being paid appropriate rates above the minimum threshold, it is worth beginning the process now.
You can also review our previous article on Statutory Pay Rates in 2022-23, which covers other areas such as SSP, SMP and SPP.
Another relevant update for employers is around hybrid and flexible working. The legislation has yet to formally change, but the government confirmed in December that it supported a Bill proposing that the right to request flexible working be an automatic entitlement from day one of employment.
This change may require updates to HR policies and recruitment protocols to ensure all staff are aware of this right and requests are processed appropriately and in line with evolving regulations.
We hope these reminders, updates and notices are helpful and allow you to verify whether you are prepared for changes to taxation, payroll, and government support payments in the months ahead.
As always, if you require further advice, support, or financial assistance, please contact the SAS Accounting team at any time or drop into our next coffee morning for an informal chat – you can find details of the next session in our monthly newsletters.