Mini-budget decisions: application date?

Ben_Holly

Hi,

There are rumors that Friday's mini-budget announcement will include changes to  income tax thresholds. If so, I wonder if it'll be applicable on incomes earned on past tax years which I am due to return? Regardless, when the mini-budget decisions will be applied?

Cheers

Robbie64

I doubt anyone will know until the mini budget is unveiled.

calcotti

Ben_Holly said:

Hi,

There are rumors that Friday's mini-budget announcement will include changes to  income tax thresholds. If so, I wonder if it'll be applicable on incomes earned on past tax years which I am due to return? Regardless, when the mini-budget decisions will be applied?

How can anyone be expected to answer that until the announcement is made. 

Ben_Holly

Many thanks for your responses, I'll wait until tomorrow.

PS. thought we could predict the answers to my questions from past mini-budget announcements.

Grumpy_chap

Ben_Holly said:

Hi,

There are rumors that Friday's mini-budget announcement will include changes to  income tax thresholds. If so, I wonder if it'll be applicable on incomes earned on past tax years which I am due to return? Regardless, when the mini-budget decisions will be applied?

Cheers

The past is the past.
The mini-budget can only change the present and the future.
Changes to income tax thresholds will not be applicable to previous tax years.

NedS

Grumpy_chap said:

Ben_Holly said:

Hi,

There are rumors that Friday's mini-budget announcement will include changes to  income tax thresholds. If so, I wonder if it'll be applicable on incomes earned on past tax years which I am due to return? Regardless, when the mini-budget decisions will be applied?

Cheers

The past is the past.
The mini-budget can only change the present and the future.
Changes to income tax thresholds will not be applicable to previous tax years.

I agree, it is extremely unlikely that any changes announced on Friday would be retrospective. Almost certain that any announced changes will be for tax year 2023/24, but you will find out on Friday.

sheramber

If thresholds are reduced would you expect that to apply to previous years?

NedS

sheramber said:

If thresholds are reduced would you expect that to apply to previous years?

No. I'm not aware of any precedent for that, and it would create an administrative nightmare trying to retrospectively change income tax thresholds - plus all the knock on effects - someone has now has more net earnings due to less tax being paid, so were entitled to less (or no) means tested benefits (UC) which would now need to be recovered, and because they are now no longer entitled to UC, all those knock on benefits were also over paid, like free school meals, free dentistry and prescriptions. It would create an absolute mess.
Any changes will apply in April to 2023/24 tax year at the earliest.