Budget 2023
In his Budget speech of 21 February 2023, the Minister for the Treasury, the Hon. Dr Alex Allinson, MHK, announced various taxation and National Insurance measures.
Following the Budget, the Income Tax Division of Treasury published the following Practice Notes:
PN 220/23 – Budget 2023 – Income Tax and National Insurance Proposals
PN 207/19 REVISED – National Insurance Holiday Scheme
Budget 2023 – Tax Headlines
- The income tax personal allowance will remain at £14,500 for a resident individual and £29,000 for a jointly assessed couple
- The personal allowance will be reduced by £1 for every £2 that a person’s total income is above £100,000 (£200,000 for jointly assessed couples). This means if a person’s total income is £129,000 (£258,000 for jointly assessed couples) or above their personal allowance will be zero
- The income tax lower rate for individuals remains at 10% and the higher rate at 20%
- The threshold at which the higher rate becomes payable remains at £6,500 for an individual and £13,000 for a jointly assessed couple
- The first £600 of any general benefits in kind provided to an employee by an employer in any year will be exempt from income tax. Only the amount above £600 will now be taxable. This will not apply in respect of accommodation and associated expenses. The treatment of bicycles, cars and fuel remains unaffected
Budget 2023 –National Insurance Headlines
- The Upper Earnings Limit for Primary Class 1 National Insurance contributions is increasing from £823 per week to £864 per week
- The thresholds at which both employees and employers start to pay Class 1 NIC are increasing from £138 per week to £145 per week
- The Lower Earnings Limit is remaining at £123 per week
- The Class 2 contribution paid by an individual who is self-employed will increase to £5.70 per week and £7.00 per week for a share-fisherman
- The Class 2 Small Earnings Exception Limit and Class 4 Lower Profits Limit are increasing from £7,176 annually to £7,540 annually. The annual Class 4 Upper Profits Limit is increasing from £42,796 to £44,928
- The Class 2 contribution payable by a volunteer development worker, which is linked to the Lower Earnings Limit, will remain at £6.15 per week
- The Class 3 voluntary contribution rate will increase from £15.85 per week to £17.45 per week
- The maximum value of a refund under the National Insurance Holiday Scheme is increased from £4,000 to £4,400
- The minimum annual gross salary which must be earned in order to qualify for a refund under the National Insurance Holiday Scheme is increased from £21,000 to £23,000
- The requirement to work a minimum number of hours to qualify for a refund under the National Insurance Holiday Scheme has been removed
