1% reduction in Income Tax
On the 23rd September 2022, Kwasi Kwarteng, the Chancellor of the Exchequer, announced a ‘mini-budget' with multiple tax cuts.
The planned 1% reduction in Income Tax which was scheduled for April 2024 has been bought forward to April 2023. This means that the basic rate of income tax will be reduced from 20% to 19%.
What this means for you
In 2023-2024, due to income tax savings, basic rate taxpayers will be on average £130 better off, and higher rate taxpayers will be on average £360 better off. To better visualise this, here’s a few examples of how much you might save for the 2023/24 tac year based on your income:
| Gross wage | Income Tax Paid (2022) | Income Tax Paid (2023) | Yearly Saving |
|---|---|---|---|
| £15,000 | £486 | £462 | £24 |
| £20,000 | £1,486 | £1,412 | £74 |
| £30,000 | £3,486 | £3,312 | £174 |
| £40,000 | £5,486 | £5,212 | £274 |
| £50,000 | £7,486 | £7,112 | £374 |
| £60,000 | £11,432 | £11,055 | £377 |
| £75,000 | £17,432 | £17,055 | £377 |
| £100,000 | £27,432 | £27,055 | £377 |
Find out more
Use our Income Tax calculator to find out how much tax you currently pay, or our Salary Calculator to get a full breakdown of your wage.
To learn more about the mini-budget changes, we recommend reading the Governments press release.