Tax year 2022/23 – get your ducks in a row

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Tax year 2022/23 – get your ducks in a row

Effective tax planning strategies can help shield you from the chill this spring.

While there's minimal change in the operation and structure of the taxation of UK individuals, the ‘no change’ element is significant. Excluding the 1.25 percentage point increase to National Insurance and Dividend Tax rates from April 2022, while we await the new Social Care Levy, the big tax freeze is on. Stemming from the Spring 2021 Budget when most major tax rates, bands and allowances were frozen until 2025–26, freezing is often regarded as a stealth tax.

Estimates from the Institute for Fiscal Studies suggest by 2025 there could be five million higher rate taxpayers, a 900,000 increase2; they summarise, ‘Freezing things for a long period makes a big difference.’ By way of example, frozen allowances, growth in assets and accumulation of unspent income could see more people falling into the Inheritance Tax (IHT) net.

2IFS, March 2021