As advisers sew up the busy last few days of the 2022/23 tax year, there is a long list of tax considerations – be it frozen or reduced thresholds and allowances, or relaxations around how much can be saved in a pension – which will affect different clients in different ways from 6th April onwards.

In this useful summary, Aegon’s Pensions Director Steven Cameron (pictured) sets out some of the key tax changes, what to look out for and some tips to boost ‘new tax year’ finances.

Income tax thresholds – cuts and freezes

“In the November Budget, the Chancellor confirmed the income tax bands which determine the rate of income tax people pay would be frozen, now until April 2028, which means they are not increasing in line with inflation. In addition, the threshold above which people pay the additional rate of income tax is being reduced from £150,000 to £125,140.

“Freezing the starting point for paying basic rate and higher rate income tax, rather than increasing these in line with inflation, means that as someone’s pay rises they will ‘by stealth’ be paying tax on a larger proportion of their earnings. Some individuals will find they start paying tax for the first time or move into the higher rate tax band, which starts at £50,271,1 or cross the lowered threshold into paying additional rate income tax.

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