With the second payment on account due at the end of July, this is a useful reminder to firstly file your 2022/23 tax return(!) whilst also considering if you are able to reduce the 2024 payments on account.

Payment timeline

• 31/01/2023
  • First payment towards the 2022/23 tax liability.
• 31/07/2023
  • Second payment towards the 2022/23 tax liability.
• 31/01/2024
  • Balancing (re)/payment in respect of the 2022/23 tax liability.
  • First payment towards the 2023/24 tax liability.
• 31/07/2024
  • Second payment towards the 2023/24 tax liability.

The 2024 payments on account will be based upon your 2022/23 tax liability, therefore if income not taxed at source has ceased or your overall income has reduced, it is worthwhile drafting up an estimated 2023/24 liability.

2023/24 Tax Thresholds

• Personal tax-free allowance
  • £12,570 (reduced where your adjusted net income exceeds £100k)
• Basic Rate Band
  • next £37,700
• Higher Rate Band
  • £37,701 – £125,140
• Additional Rate Band
  • >£125,140

• Dividend nil-rate
  • £1,000
• Savings Allowance
  • £1,000 (basic rate taxpayers)
  • £500 (higher rate taxpayers)
  • £0 (additional rate taxpayers)

Remember the main tax thresholds can be extended by personal pension contributions and gift aid donations. Step 2 deductions such as losses from unincorporated business interests or interest on partnership loans can also reduce the level of income subject to tax.

Once you have calculated the tax liability, tax reducers such as EIS investments can also help mitigate your overall position.

It is worth noting that those paying down their student loan will need to account for any additional charge depending on the plan threshold. Individuals exceeding the pension annual allowance may also suffer an income tax charge and parents claiming Child Benefit with income over £50,000 will need to factor in the High Income Child Benefit Charge [https://www.gov.uk/child-benefit-tax-charge].

With increased mortgage rates only adding to the cost of living crisis, there has not been a better time to plan ahead for tax bills and managing your personal cashflow.

Please do get in touch if we can assist.