The 2022-23 UK tax year is best remembered for what almost happened. Three Chancellors, two Prime Ministers, a 23-day Growth Plan that was reversed in stages between late September and mid-October, and a market crisis that forced the Bank of England into emergency intervention all combined to produce a tax year of unprecedented in-year volatility. For owner-managed businesses, the practical question at the end of the year was simple: what actually changed?
This is our settled view, written in the second week of April 2023, of what 2022-23 left behind and what disappeared with the policy reversals.
What stuck
The 1.25 percentage point increase in National Insurance, in force from April to November 2022, was reversed from 6 November 2022. The Health and Social Care Levy due to replace it from April 2023 was scrapped entirely. The Stamp Duty Land Tax nil-rate band rise to £250,000 for residential property survived, subject to a later taper. The National Insurance primary threshold was permanently aligned with the personal allowance at £12,570. These were the only durable rate or threshold movements from the entire year.
From the Autumn Statement of 17 November, the threshold freezes to April 2028 across the personal allowance, higher rate threshold, inheritance tax nil-rate band, and residence nil-rate band all entered force and remain in force today. The capital gains tax annual exempt amount was confirmed to fall from £12,300 to £6,000 in April 2023 and to £3,000 in April 2024. The dividend allowance was confirmed to fall from £2,000 to £1,000 in April 2023 and to £500 in April 2024. The additional rate threshold was confirmed to fall from £150,000 to £125,140 from April 2023.
What disappeared
The corporation tax rise from 19% to 25% from April 2023 was scrapped in the Mini-Budget and then reinstated three weeks later. It took effect on schedule. The reversal of IR35 reforms was reversed itself within a fortnight; the rules remain in force. The proposed abolition of the additional rate of income tax never reached legislation. The 1p basic rate cut originally promised by Sunak in March 2022, then accelerated by Kwarteng to April 2023, then reversed by Hunt in October, never happened in any form.
What clients actually felt during 2022-23
For employees and directors paid through PAYE, the most visible mid-year change was the November 2022 reversal of the National Insurance increase, which produced a small in-year refund through payroll for the rest of the year. For the self-employed, Class 4 NIC was similarly adjusted. For owner-managed companies, dividend planning around the year-end became unusually complex because the additional rate threshold reduction to £125,140 was only confirmed in November and took effect in April. Many directors brought dividend distributions forward into 2022-23 to use the £150,000 threshold one last time — a planning move that produced clear cash savings for higher earners.
For property landlords, the capital gains tax annual exempt amount cut from £12,300 to £6,000 in April 2023 changed the calculus on disposals. Several clients accelerated planned sales into March 2023 to crystallise gains while the larger allowance was still available. Our tax planning team supported these decisions with detailed pre-disposal modelling.
The corporation tax pivot
The single most consequential change crystallising at the very end of 2022-23 was the corporation tax move to 25% from 1 April 2023 with the reintroduction of marginal relief between £50,000 and £250,000. We had been preparing clients for this change since late 2021, but the Mini-Budget had briefly suggested it would never happen, and the reinstatement in October 2022 left only five months for definitive planning. The associated companies rules, dormant since the 2015 abolition, returned with full force and caught out several owner-managers with multiple corporate vehicles. Our annual accounts team built associated company reviews into every March 2023 year-end engagement.
Energy and cost-of-living context
Beneath the tax volatility, 2022-23 was dominated by the cost-of-living crisis. The Energy Price Guarantee, in force from October 2022, capped average household bills at £2,500 and was extended at £3,000 from April 2023. Business energy support ran in parallel under the Energy Bill Relief Scheme. For our SME clients, the rapid rise in energy costs through autumn 2022 reshaped cash flow forecasts more aggressively than any tax measure announced during the year.
The single biggest lesson
The 2022-23 tax year produced almost no lasting headline rate changes, but it locked in a six-year freeze on the most important personal tax thresholds and confirmed the corporation tax rise to 25%. These two structural changes together account for the overwhelming majority of the additional tax revenue raised by HMRC from SMEs over the years that followed.
For a structured review of your 2022-23 position and how it has rolled forward, contact our team and we will produce a multi-year tax position summary.