At the time of writing, on 3rd April 2023, there was very little information on the gov.uk website about self employed tax rates for 2023/24. This has finally been updated. This is what the 2023/24 tax rates are likely to be for self employed people in the UK.
The 2023/24 tax year in the UK runs from 6th April 2023 to 5th April 2024. Tax returns for this tax year are generally due by 31st January 2025. Things have been pretty bleak for the self employed over the last few years. The good news is general simplification and alignment of various rates and thresholds. For example, the Dividend Allowance, Personal Savings Allowance, Trading Allowance and Property Allowance are all now £1,000 each.
There’s also now an alignment between the Personal Allowance (£12,570), the Class 2 Lower Profits Threshold and the Class 4 Lower Profits Threshold. Still no sign of Class 2 NI being scrapped, as suggested many times over the last 10 years or so.
Of course the big blow is aimed squarely at limited company directors with tax increases both on the Dividends side and Corporation Tax of up to 25%.
Here are some of the most common at-a-glance figures you might find useful for the tax year.
2023/24 Tax Rates for small businesses in the UK
- Tax Year: 6th April 2023 to 5th April 2024
- Tax Return Deadline: 31st January 2025
- Personal Allowance: £12,570 (visit this page)
- Basic Tax Rate: 20% (£12,571-£50,270)
- Higher Tax Rate: 40% (£50,271-£150,000)
- Additional Tax Rate: 45% (over £150,000)
- Dividend Rate *: 8.75%
- Dividend Allowance: £1,000 (visit this page)
- Personal Savings Allowance *: £1,000 (visit this page)
- Trading Allowance: £1,000 (visit this page)
- Property Allowance: £1,000 (visit this page)
* For basic rate tax payers.
2023/24 National Insurance Rates for small businesses in the UK
- Class 2 Small Profits Threshold: £6,725
- Class 2 Lower Profits Threshold: £12,570
- Class 2 Rate per week: £3.45
- Class 4 Lower Profits Threshold: £12,570
- Class 4 NI Rate: 9%
- Class 4 Rate above £50,270: 2%
- For full details and past rates visit this page
Other useful information for small businesses in 2023/24 tax year
- VAT threshold: £85,000 turnover
- Standard VAT rate: 20%
- Corporation Tax Small Profit Rate: 19% (under £50,000 taxable profits) *
- Corporation Tax Main Rate: 25% (over £250,000 taxable profits) *
- Annual Investment Allowance: £1m
- Cash Basis Limit: £150,000 turnover (visit this page)
- Payment on Account threshold: £1,000 total tax bill (visit this page)
- State Pension Age: 67 (visit this page)
- Qualifying Years Required for Full State Pension: 35 (visit this page)
* Visit this page for more information about Corporation Tax rates. Marginal relief may be available from £50,000 to £250,000 profits but at the time of writing it’s not entirely clear how this will work. Calculator here.
Please note that the above information is just intended as an ‘at-a-glance’ quick summary summary. Please visit the relevant links for full details. You should always seek professional guidance from a qualified accountant.
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Last Updated on 3 July 2023 by Andy Mac