Finance Act 2022

1 Income tax charge for tax year 2022-23

Income tax is charged for the tax year 2022-23.

2 Main rates of income tax for tax year 2022-23

For the tax year 2022-23 the main rates of income tax are as follows—

3 Default and savings rates of income tax for tax year 2022-23

(1) For the tax year 2022-23 the default rates of income tax are as follows—

(a)

(a) the default basic rate is 20%,

(b)

(b) the default higher rate is 40%, and

(c)

(c) the default additional rate is 45%.

(2) For the tax year 2022-23 the savings rates of income tax are as follows—

(a)

(a) the savings basic rate is 20%,

(b)

(b) the savings higher rate is 40%, and

(c)

(c) the savings additional rate is 45%.

4 Increase in rates of tax on dividend income

(1) In section 8 of ITA 2007 (which provides, among other things, for the dividend ordinary rate, dividend upper rate and dividend additional rate)—

(a)

(a) in subsection (1) (the dividend ordinary rate), for “7.5%” substitute“8.75%”,

(b)

(b) in subsection (2) (the dividend upper rate), for “32.5%” substitute“33.75%”, and

(c)

(c) in subsection (3) (the dividend additional rate), for “38.1%” substitute“39.35%”.

(2) In section 9(2) of ITA 2007 (the dividend trust rate), for “38.1%” substitute “39.35%”.

(3) The amendments made by this section have effect for the tax year 2022-23 and subsequent tax years.

5 Freezing starting rate limit for savings for tax year 2022-23

(1) For the tax year 2022-23 the amount specified in section 12(3) of ITA 2007 (the starting rate limit for savings) is “£5,000”.

(2) Accordingly, section 21 of that Act (indexation) does not apply in relation to the starting rate limit for savings for that tax year.

6 Rate of surcharge and surcharge allowance

(1) In section 269DA(1) of CTA 2010 (surcharge on banking companies), for “8%” substitute “3%”.

(2) In each of the following provisions of Part 7A of CTA 2010 (which make provision in relation to the surcharge allowance), for “£25,000,000” substitute —

(a)

(a) section 269DE(3) and (4),

(b)

(b) section 269DF(2) and (3), and

(c)

(c) section 269DJ(3).

(3) The amendments made by this section have effect for accounting periods beginning on or after 1 April 2023.

(4) The remaining provisions of this section deal with a case where a company has an accounting period (a “straddling period”) beginning before 1 April 2023 and ending on or after that date.

(5) For the purpose of calculating—

(a)

(a) the amount of surcharge chargeable on a company for the straddling period, and

(b)

(b) the sum chargeable on a company at step 5 in section 371BC(1) of TIOPA 2010 (and see, in particular, section 371BI of that Act) for the straddling period,

so much of the straddling period as falls before 1 April 2023, and so much of it as falls on or after that date, are to be treated as separate accounting periods.

(6) If it is necessary to apportion an amount for the straddling period to the two separate accounting periods, see section 1172 of CTA 2010 (which applies as a result of section 269DL of CTA 2010).

7 Abolition of basis periods

Schedule 1 makes provision for and in connection with the abolition of basis periods under Chapter 15 of Part 2 of ITTOIA 2005.

8 Profits of property businesses: late accounting date rules

(1) Chapter 3 of Part 3 of ITTOIA 2005 (profits of property businesses: basic rules) is amended as follows.

(2) In section 275 (apportionment etc of profits to tax year)—

(a)

(a) in subsection (1), for “This section applies” substitute“This section and sections 275A to 275C apply”;

(b)

(b) at the end insert—

(5) Sections 275A and 275B contain rules for the purpose of avoiding the need to apportion profits or losses under this section (and section 275C makes provision for the person carrying on the business to elect for those rules not to apply).”

(3) After section 275 insert—

(4) The amendments made by this section have effect for the tax year 2023-24 and subsequent tax years.

9 Liability of scheme administrator for annual allowance charge

(1) Part 4 of FA 2004 (pension schemes etc) is amended as follows.

(2) In section 237B(5)(a) (liability of scheme administrator for annual allowance charge), for “not later than 31 July in the year following that in which the tax year ends” substitute “in accordance with the time limit in section 237BA”.

(3) After that section insert—

(4) In section 254 (accounting for tax by scheme administrators)—

(a)

(a) in subsection (7A), for the words from “the period ending” to the end...