Finance expert warns some working people could pay more tax from next month

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The freeze on income tax thresholds could see high-earners paying more tax on their salary

People are being warned they could end up paying more tax in 2023 once the new financial year begins on April 6. Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said frozen thresholds and cuts to tax breaks are among the pressures people should be aware of this year.

She continued: “Salaries rising automatically increases the amount of tax we pay, but the frozen thresholds also mean that the more wages rise, the more people will cross the frozen thresholds to pay a higher rate of tax. The additional rate threshold hasn't moved from £150,000 since it was introduced in 2010, which already meant more people moving into the tax bracket through wage inflation.

Ms Coles said that people could also end up paying more tax on profits and dividends. She warned: "Business owners who pay themselves with dividends out of profits will take a hit at a time where they're facing threats to their businesses from all angles - from runaway energy bills to rising prices and wage bills."

 

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