The previous Chancellor, Rishi Sunak, had dangled a possible cut in the basic rate of income tax from 20% to 19% from 2024/25. This will now be brought forward by one year to 2023/24 and will apply to non-dividend income.

The 45% and 39.35% ‘additional rates’ of income tax that apply to income over £150,000 will be abolished from 6 April 2023.

This will mean that, in 2023/24, there will be just two rates of tax on general income – 19% and 40%, with two dividend income tax rates of 7.5% and 32.5%.

Further, those who would have otherwise been additional rate taxpayers will, from 6 April 2023, benefit from a Personal Savings Allowance of £500, in line with higher rate taxpayers. This was not previously available to them. Savings income within the Allowance is taxed at 0%.

It must be noted that Scottish income tax rates for general income are set independently, and we await the results of the Scottish Budget Review for more information on the rates applicable in Scotland next year.