How it works
2023/24 tax year: what changed
The 2023/24 UK tax year (6 April 2023 – 5 April 2024) was notable for two significant changes from the prior year, both affecting higher earners:
- Additional rate threshold lowered from £150,000 to £125,140 — aligning it with the point at which the Personal Allowance fully disappears
- Employee NI cut mid-year — from 12% to 10% from 6 January 2024 (announced in the Autumn Statement 2023)
- All other main Income Tax thresholds frozen for the third consecutive year
2023/24 Income Tax rates (England, Wales, NI)
| Tax Component | 2023/24 Rate | Threshold |
|---|---|---|
| Personal Allowance | 0% | £0 – £12,570 |
| Basic rate Income Tax | 20% | £12,571 – £50,270 |
| Higher rate Income Tax | 40% | £50,271 – £125,140 |
| Additional rate Income Tax | 45% | Over £125,140 (lowered from £150k) |
| Employee NI (Apr–Dec 2023) | 12% | £12,570 – £50,270 |
| Employee NI (Jan–Apr 2024) | 10% | £12,570 – £50,270 |
| Employee NI upper rate | 2% | Over £50,270 |
The National Insurance mid-year cut in detail
The Autumn Statement 2023 (22 November 2023) announced a 2-percentage-point cut to employee Class 1 NI, from 12% to 10%, effective 6 January 2024. This affected 3 months of the 2023/24 tax year.
On an annual basis, a worker on £35,000 received a NI saving of approximately £227 for the 3 months at the lower rate.
| Salary | Full-year at 12% | Blended 2023/24 | Saving vs prior year |
|---|---|---|---|
| £25,000 | £1,491.60 | £1,430.40 | £61.20 |
| £35,000 | £2,691.60 | £2,464.20 | £227.40 |
| £50,000 | £4,521.60 | £4,390.20 | £131.40 |
Impact of the reduced additional rate threshold
In 2022/23, the additional rate (45%) applied only above £150,000. From 6 April 2023, it was lowered to £125,140 — the same point where the Personal Allowance fully tapers out.
This change affected approximately 250,000 taxpayers (HMRC estimate).
Scottish Income Tax 2023/24
Scotland introduced its highest ever Income Tax rate in 2023/24 — a new Top rate of 47% on earnings above £125,140:
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter rate | £12,571 – £14,732 | 19% |
| Basic rate | £14,733 – £25,688 | 20% |
| Intermediate rate | £25,689 – £43,662 | 21% |
| Higher rate | £43,663 – £125,140 | 42% |
| Top rate | Over £125,140 | 47% |