The super-deduction, which allowed companies to claim an immediate deduction of 130% of their qualifying expenditure, came to an end on 31 March 2023. It was replaced with full expensing. As with the super-deduction, unincorporated businesses cannot benefit from full expensing (although the Annual Investment Allowance (AIA) will secure a 100% deduction for qualifying expenditure up to the annual AIA limit of £1 million).

Nature of full expensing

Full expensing allows companies to claim, in the form of a capital allowance, immediate relief for the full amount of qualifying capital expenditure. Although at a rate of 100% of qualifying expenditure, the rate of relief is the same as under the AIA, unlike the AIA, there is no cap on the amount of the expenditure which can benefit.

As with its predecessor, the availability of full expensing is time-limited – it only applies to qualifying expenditure which is incurred in the three-year period from 1 April 2023 to 31 March 2026. Expenditure is eligible for full expensing if it would otherwise qualify for main rate writing down allowances and is not excluded expenditure. The main category of excluded expenditure is that on cars (although a 100% first-year allowance is available for expenditure on new zero emission cars).

Full expensing will benefit companies making significant capital investment in excess of the £1 million limit applying under the AIA. It can be used instead of the AIA to leave the AIA limit free for use against qualifying expenditure that would otherwise qualify for special rate writing down allowances.

As with other capital allowances, full expensing is optional and must be claimed.

Balancing charges will apply if the asset is sold, the disposal proceeds being brought into account. Consequently, if the intention is only to keep the asset for a short time and to dispose of it before it has lost much of its value, it may be preferable to claim writing down allowances instead to avoid a clawback of the relief in the not-too-distant future.

50% first-year allowance

A 50% first-year allowance was introduced alongside the super-deduction. It allowed companies to claim an immediate 50% deduction for expenditure that would otherwise qualify for special rate writing-down allowances (such as that on thermal insulation). The 50% first-year allowance has been extended and is now available without limit for qualifying expenditure incurred in the three-year period from 1 April 2023 to 31 March 2026. As with full expensing, the 50% first-year allowance is not available to unincorporated businesses.

The 50% first-year allowance will be useful where the AIA limit of £1 million has already been used up. If some or all of the AIA limit remains available, this should be used first as it will provide a higher rate of relief.

Claims for the 50% first-year allowance are optional. Where the allowance is claimed, the balance of the expenditure is allocated to the special rate pool and relieved by writing down allowances (at the rate of 6% on a reducing balance basis) in subsequent years.

Annual Investment Allowance

The AIA limit of £1 million has now been made permanent.

Spouses and civil partners enjoy certain tax breaks, including the ability to transfer assets between them at a value that gives rise to neither a gain nor a loss. Prior to 6 April 2023, a couple are only able to benefit from no gain/no loss transfers until the end of the tax year in which they separate. However, from 6 April 2023, the rules are relaxed in certain situations.

New three-year rule

The window during which separating and divorcing couples are able to transfer assets between them at a value that gives rise to neither a gain nor a loss is extended. From 6 April 2023, separating and divorcing couples will have up to three years from the tax year in which they cease to live together to make no gain/no loss transfers. The no gain/no loss rule will continue to apply until the earlier of:

• the end of the third tax year following that in which the couple cease to live together; or
• the day on which the court grants an order or decree for their divorce, the annulment of their marriage, the dissolution or annulment of their civil partnership, their judicial separation or a separation in accordance with a separation order.

It should be noted that while making a no gain/no loss transfer prevents a chargeable gain arising on the transferor spouse/civil partner, the transferee assumes the transferor’s base cost. The gain at the date of disposal is effectively transferred to the transferee spouse/civil partner and will crystallise when they dispose of the asset. This may not be what they want.

Assets forming part of a formal divorce agreement

From 6 April 2023, assets that form part of a formal divorce agreement can be transferred between the former spouses/civil partners on a no gain/no loss basis without time limit.

Matrimonial home and private residence relief

The rules on the availability of private residence relief where a person disposes of a retained interest in their former main home in which their former spouse or civil partner continues to live have been amended. From 6 April 2023, where one partner transfers their share of the former matrimonial home to their former spouse/civil partner but under an agreement is entitled to receive a share of the profit made on the eventual disposal of the property, they will be entitled to private residence relief in the same proportion that qualified for relief on the original disposal to their former partner. Where the original disposal was made on a no gain/no loss basis, private residence relief is available for the proportion of the gain that qualified for the no gain/no loss treatment.

Employees often need to undertake business trips and it is common practice to reimburse the employee’s fuel costs by means of a mileage allowance. The tax rules allow mileage payments to be made tax-free up to certain limits. However, the rules are different depending on whether the employee is driving their own car or a company car.

Employees using their own cars

If an employee uses their own car for business, you can pay mileage allowances tax-free up to the ‘approved amount’. This is set for the tax year, rather than for each individual journey, and is found by multiplying the business mileage in the tax year by the approved mileage rate. For cars and vans, the approved mileage rate is set at 45p per mile for the first 10,000 business miles in the tax year and at 25p per mile for any further business miles. For motorcycles, the rate is 24p per mile and for cycles the rate is 20p per mile.

The approved amount is the maximum amount that can be paid tax-free, even if the actual cost exceeds the approved amount.

Example

An employee drives 12,000 business miles in the tax year using his own car. The maximum that can be paid tax-free is £5,000 (10,000 miles @ 45p per mile plus 2,000 miles @ 25p per mile).

If the amount that is paid is less than the approved amount, the employee can claim tax relief for the difference between the approved amount and the mileage allowance paid, if any.

If the employee gives a lift to one or more colleagues, you can also make a tax-free passenger payment of 5p per passenger per business mile. There is no corresponding relief if you choose not to make passenger payments.

Company car drivers

If an employee has a company car but pays for the fuel, you can meet the cost of business mileage tax-free, as long as the amount paid does not exceed the current advisory fuel rate. The advisory fuel rates are set by HMRC and are updated quarterly. They are lower than the approved mileage rates because the approved rates also reflect depreciation and running costs, as well as the cost of the fuel. By contrast, the advisory rates are fuel-only rates.

The advisory rates applying from 1 March to 31 May 2023 are as shown in the table below.

Engine size	Petrol – rate per mile	LPG – rate per mile
1,400cc or less	13p	10p
1,401cc to 2,000cc	15p	11p
Over 2,000cc	23p	17p

Engine size	Diesel – rate per mile
1,600cc or less	13p
1,601cc to 2,000cc	15p
Over 2,000cc	20p

If the employee drives an electric company car, you can pay a mileage rate of 9 pence per mile tax-free.

In his March Budget, the Chancellor announced a number of changes to the pension tax rules, including an increase in the annual allowance and the abolition of the lifetime allowance.

Annual allowance

The annual allowance places a cap on tax-relieved pension savings. Individuals can obtain tax relief on contributions to a registered pension scheme of up to 100% of their earnings or, if greater, £3,600 as long as their available annual allowance is sufficient to cover their contributions. Employer contributions are not subject to the earnings limit, but they do count towards the annual allowance.

The annual allowance is increased to £60,000 from £40,000 for the 2023/24 tax year.

Unused allowances can be carried forward for up to three years. However, the current year’s allowance must be used before utilising unused allowances from earlier years.

Annual allowance taper

High earners have a reduced annual allowance. The taper applies where threshold income exceeds £200,000 and adjusted net income exceeds £260,000. Threshold income is, broadly, income excluding pension contributions, whereas adjusted net income includes pension contributions.

The taper reduces the annual allowance by £1 for every £2 by which adjusted net income exceeds £260,000 until the minimum amount of the allowance is reached. For 2023/24, this is set at £10,000. Consequently, individuals with threshold income of at least £200,000 and adjusted net income of at least £360,000 will only receive the minimum allowance of £10,000 for 2023/24.

For 2020/21 to 2022/23 inclusive, the taper applied where adjusted net income exceeded £240,000 and threshold income exceeded £200,000, reducing the allowance by £1 for every £2 by which adjusted net income exceeded £240,000 until the minimum allowance of £4,000 was reached.

Lifetime allowance

The lifetime allowance places a cap on lifetime tax-relieved pension savings. It is set at £1,073,100. If tax-relieved pension savings exceeded the lifetime allowance, a tax charge applied for 2022/23 and earlier tax years. The charge was set at 55% of the excess where this was taken as a lump sum and at 25% of the excess where it was taken as a pension. The lifetime allowance charges are abolished from 6 April 2023. Legislation in a future Finance Bill will abolish the lifetime allowance. This paves the way for individuals whose pension pot has reached £1,073,100 to start making pension contributions again.

As a result of these changes, a cap is placed on the amount that can be taken as a tax-free lump sum. This is now 25% of the pension pot or, where lower, £268,275. The figure of £268,275 is 25% of the lifetime allowance of £1,073,100.

Money purchase annual allowance

The money purchase annual allowance (MPAA) is a lower annual allowance that applies where a person has flexibly accessed their pension pot having reached the age of 55. The MPAA is set at £10,000 for 2023/24.

If you incur expenses in doing your job, you may be able to claim tax relief. While the rules governing the availability of relief are strict, the process for claiming relief where it is available is relatively straightforward.

Availability of tax relief

Expenses that may qualify for tax relief include travel expenses incurred in relation to business travel, mileage allowances if you use your own car for business journeys, the cost of professional fees or subscriptions and the additional costs of working at home. However, it should be noted that the rules are strict and where a deduction is not granted by a specific provision, the general rule only permits a deduction for expenses incurred wholly, exclusively and necessarily in the performance of the duties of your employment.

Claiming relief  

If you are eligible to claim tax relief for employment expenses, there are various ways in which this can be done.

Route 1: Claim online

You may be able to claim online.

Before making a claim, you can check whether you can use the online service by using the tool which can be found at www.tax.service.gov.uk/claim-tax-relief-expenses. You cannot make a claim online if:

• you are making the claim on behalf of someone else;
• you complete a self-assessment tax return;
• you are claiming tax relief for expenses of more than £2,500; or
• you are making a claim for more than five different jobs.

If you are eligible to use the online claim service, you will need to include all the expenses that you want to claim for the relevant tax year. The total shown on the summary page will be used to work out the tax relief to which you are entitled.

The online service is available on the Gov.uk website at www.gov.uk/guidance/claim-income-tax-relief-for-your-employment-expenses-p87.

Route 2: Postal claim

You must make a claim by post if you are claiming on behalf of someone else or you are claiming relief for expenses for more than five jobs. Postal claims are only accepted on form P87, which is available to download on the Gov.uk website at www.gov.uk/government/publications/claim-income-tax-relief-for-your-employment-expenses-by-post.

It should be noted that the following information is mandatory, and the form will be rejected if it is not included:

• all section 1 information with the exception of title and contact phone number;
• the employer’s PAYE reference in section 2; and
• the type of industry in respect of which expenses are being claimed in section 2.

Route 3: Telephone claims

A claim can be made by phone (0300 200 3300) if a claim has been made in previous years for the same expense type and your total expenses are either less than £1,000 or less than £2,500 for professional fees and subscriptions.

Claims cannot be made by phone for expenses incurred as a result of working from home.

Route 4: Self-assessment tax return

If you complete a self-assessment tax return, you should claim relief for employment expenses in the employment pages of your tax return.

Trivial benefits have their own tax exemption, which if used wisely can be used to treat employees. The exemption can also be used by personal and family companies as part of a tax-efficient profit extraction strategy.

Nature of the exemption

The exemption applies if all of the following conditions are met:

1. The cost of providing the benefit does not exceed £50.
2. The benefit is not cash or a cash voucher.
3. The employee is not contractually entitled to the benefit.
4. The benefit is not provided in recognition of particular services.

Where the benefit is provided to a group of employees and it is impracticable to work out the cost of providing the benefit to each individual employee, the average cost can be used instead. To fall within the terms of the exemption, this should not exceed £50.

The exemption can be used to give employees Christmas or birthday gifts or treats unrelated to their performance.

There are, however, a number of traps to be wary of.

Trap 1: Close company trap

If the employer is a close company, the total value of tax-free trivial benefits that can be provided to a director or other office holder (or a member of their family or household) is capped at £300 a year. Otherwise there is no limit on the number of tax-free trivial benefits that can be provided in the tax year.

Trap 2: Reward for services trap

The exemption does not apply if the benefit is a reward for services. This means that it does not apply to a gift given to an employee for working later or for going above and beyond what is expected to deliver an excellent service to a client. This restriction also means that it cannot be used to shelter a taxi home when an employee works late and the journey is not covered by the separate exemption for late night taxis. In each case, the benefit is a reward for services and does not pass the trivial benefit test.

Trap 3: Contractual entitlement trap

The exemption does not apply if the employee has a contractual right to the benefit. This includes a right to expect it based on employer behaviour. Here, HMRC have previously used the (somewhat ridiculous) example of employees being given a cream cake every Friday to argue that their provision falls outside the trivial benefit exemption; employees have the expectation that they will receive a cake each Friday and as such the provision will fail the ‘no contractual entitlement’ test. While this may be an extreme example, it is probably wise to vary benefits provided under the terms of the exemption to avoid a potential challenge from HMRC. However, HMRC guidance instructs HMRC staff not to challenge a gift such as a birthday or Christmas gift simply because it is provided every year. They also accept that the provision of free tea and coffee is within the exemption.

Trap 4: The gift card trap

The trivial benefit exemption only applies if the cost of the benefit does not exceed £50. Caution needs to be exercised if the benefit is provided via an app or the employee is given a gift card, which is topped up periodically. Here the cost is the total cost for the tax year, rather than that each time the app or gift card is used, and where this exceeds £50 for the tax year, the exemption will not apply. For example, if an employee is given access to an app that allows them to order a free bunch of flowers costing £30 each month, the exemption will not apply despite the fact that each bunch of flowers costs less than £50 as the cost of using the app is £360 for the tax year. The trap applies in a similar way if the employee is given a season ticket for sporting or cultural events.

Proceed with caution

Used wisely, the trivial benefits exemption can be a tax-efficient way to treat employees and engender goodwill. However, care must be taken not to fall foul of the traps. If the exemption does not apply, it may be possible for the employer to use a PAYE Settlement Agreement to settle the tax bill on the employee’s behalf.

A popular profit extraction strategy is to pay a small salary and to extract further profits as dividends.

Why pay a salary?

There are a number of benefits of paying a small salary in order to take money out of a personal or family company for personal use.

Reason 1

If a salary is paid at a level that is at least equal to the lower earnings limit for Class 1 National Insurance purposes – set at £6,396 for 2023/24 – the year will be a qualifying year for state pension and contributory benefit purposes. An individual needs 35 qualifying years to be eligible for the full single-tier state pension, and at least ten qualifying years to access a reduced state pension.

Where the salary is at least equal to the lower earnings limit and does not exceed the primary threshold (set at £12,570 for 2023/24), the individual is treated as having paid Class 1 National Insurance contributions at a zero rate. This effectively gives them a qualifying year for free.

If you do not currently have the requisite 35 years, it is worthwhile paying a small salary to secure an additional qualifying year.

Reason 2

If your available personal allowance is at least equal to the salary that is paid, the salary can be paid tax-free. Extracting profits from the company without triggering a tax bill is worthwhile.

Reason 3

Salary payments and any associated employer’s National Insurance are deductible in calculating the taxable profits for corporation tax purposes. This will save corporation tax at the prevailing rate, which from 1 April 2023 is between 19% and 25% depending on the level of your taxable profits.

Reason 4

A salary can be paid regardless of the level of the company’s profits. Indeed, it is still possible to pay a salary even if doing so means that the company makes a loss. By contrast, dividends can only be paid if you have sufficient retained profits from which to pay them.

Salary level

The optimal salary level will depend on personal circumstances. However, as the standard personal allowance and the National Insurance primary threshold are now the same, if the personal allowance remains available, the position is more straightforward than in previous years.

Where the standard personal allowance is available in full, the optimal salary is one equal to the personal allowance, set at £12,570 for 2023/24. At this level, there is no tax to pay and no primary Class 1 National Insurance contributions to pay either.

There may, however, be some secondary (employer’s) National Insurance contributions to pay if the employment allowance is not available (as is the case for a personal company where the sole employee is also a director), or if it has been used up. Where this is the case, employer contributions are payable at the rate of 13.8% where the salary exceeds the secondary threshold, set at £9,100 for 2023/24. If a salary of £12,570 is paid, the secondary Class 1 National Insurance bill will be £478.86.

However, as with the salary, employer National Insurance contributions are deductible for corporation tax purposes, meaning that paying a salary equal to the personal allowance is still worthwhile.

If the employment allowance is available, as may be the case for a family company, there will be no secondary National Insurance to pay on a salary equal to the personal allowance.

Once the personal allowance has been used up, it is better to extract further profits as dividends, which are taxed at a lower rate. Any additional salary will attract tax at 20% and employee’s Class 1 National Insurance of 12%, in addition to any employer’s National Insurance that may be due. This will outweigh any associated corporation tax savings.

If the full personal allowance is not available, it is necessary to crunch the numbers as the optimal salary will depend on both individual circumstances and the rate at which the company pays corporation tax.

If you have a personal or family company, taking dividends is a popular and tax-efficient way to extract profits. However, while they remain tax efficient, recent tax changes have eroded some of the advantages. What do you need to know when planning your dividend extraction strategy for 2023/24?

Impact of corporation tax changes

From 1 April 2023, changes are made to the way in which corporation tax is calculated. If your profits are more than £50,000, you will pay corporation tax at a higher rate than prior to that date, reducing the post-tax profits that you have available to pay as a dividend. Remember, dividends are paid from retained profits and you can only pay a dividend if you have sufficient retained profits from which to pay it. Even if your profits are unchanged, you may not be able to maintain previous dividend payments if your effective rate of corporation tax rises from 1 April 2023.

Reduction in the dividend allowance

All individuals, regardless of the rate at which they pay tax, are entitled to a dividend allowance. This was set at £2,000 for 2022/23 but is halved to £1,000 for 2023/24. It is to be further reduced to £500 for 2024/25.

The dividend allowance operates as a zero-rate band. Dividends which are covered by the allowance are taxed at a zero rate, but the allowance uses up some of the tax band in which the dividends (taxed as the top slice of income) fall. The reduction in the dividend allowance will reduce the profits that can be extracted free of further tax.

In a family company, an alphabet share structure is often used to facilitate the payment of dividends to family members whose dividend allowance would otherwise be wasted, increasing the profits that can be extracted tax-free. This strategy may need reviewing in light of the falling dividend allowance.

Dividend tax rates

Dividends are attractive as the dividend tax rates are lower than the income tax rates. However, it should be remembered that corporation tax has already been paid on the profits which are paid out as dividends.

The dividend tax rates were increased by 1.25 percentage points from 6 April 2022 pending the introduction of the now-cancelled Health and Social Care Levy. Although the Health and Social Care Levy is not going ahead, the dividend tax rates are to remain at the increased levels for 2023/24. Consequently, dividends are taxed at 8.75% where they fall in the basic rate band, at 33.75% where they fall in the higher rate band and at 39.35% where they fall in the additional rate band.

Additional rate threshold

The dividend additional rate will apply if dividends are paid in excess of the dividend allowance and taxable income exceeds the additional rate threshold. This is reduced to £125,140 for 2023/24 from £150,000 previously.

Summary

As a result of these changes, you may have less profits available from which to pay dividends. Where dividends are paid, only £1,000 will be tax-free. Above this level, dividends will continue to be taxed at the higher rates introduced from April 2022. Further, the additional rate will now bite where taxable income exceeds £125,140.

In an alphabet share structure, each shareholder has a different class of share. For example, one shareholder may have A ordinary shares, another B ordinary shares, another C ordinary shares, and so on. The benefit of an alphabet share structure is that it provides the flexibility to tailor dividends to take account of the shareholder’s personal circumstances. Under company law, dividends must be paid in proportion to shareholdings. Having an alphabet share structure overcomes this restriction and is popular in family companies.

Utilising the dividend allowance

One advantage of an alphabet share structure is that it allows dividends to be paid to a shareholder who may work outside the family company but who has not fully used their dividend allowance for the tax year. The available dividend allowances can be utilised to increase the profits that can be extracted tax-free.

However, the dividend allowance is being reduced, curtailing the opportunities to extract tax-free profits in this manner. The dividend allowance was set at £2,000 for 2022/23. It is reduced to £1,000 for 2023/24 and to £500 for 2024/25. Thus, in a family company with four shareholders, it was possible to extract £8,000 of profit tax-free by making use of the shareholders’ dividend allowance in 2022/23. By 2024/25, it will only be possible to extract £2,000 of profit tax-free in this way.

Using lower tax bands

Although the reduction in the dividend allowance reduces the potential to extract profit free of further tax, having an alphabet share structure in place may still be beneficial if the shareholders have different marginal rates of tax, allowing dividends to be tailored so that they are taxed at the lowest possible rate. For 2023/24 dividends are taxed at 8.75% where they fall in the basic rate band, at 33.75% where they fall in the higher rate band and at 39.35% where they fall in the additional rate band.

Example

Albert, Betty, and Charlotte are shareholders in ABC Ltd. Albert has 100 A ordinary shares, Betty has 100 B ordinary shares and Charlotte has 100 C ordinary shares.

For 2023/24 the company has profits of £45,000 that they wish to extract. Albert has another job and is an additional rate taxpayer. Betty has an income from property of £35,270 a year and Charlotte has an income of £20,270 from her part-time job. They all have their dividend allowance available.

To minimise the tax payable, the company declares a dividend of £10 per share for A ordinary shares, a dividend of £150 per share for B ordinary shares and a dividend of £290 per share for C ordinary shares.

Albert receives a dividend of £1,000. This is sheltered by his dividend allowance and is tax-free.

Betty receives a dividend of £15,000 of which £1,000 is sheltered by her dividend allowance and is tax-free. The remaining £14,000 is taxable at the dividend ordinary rate of 8.75% (a tax bill of £1,225), which uses up her remaining basic rate band.

Charlotte receives a dividend of £29,000 of which £1,000 is sheltered by her dividend allowance and received tax-free. The remaining £28,000 falls within her basic rate band and is taxed at 8.75% (a tax bill of £2,450).

The total tax bill is £3,675.

Had each taxpayer received a dividend of £15,000, the total tax bill would have been £7,959. Albert would pay tax on £14,000 of his dividend at 39.35% and Betty and Charlotte would each pay tax at 8.75% on £14,000 of their dividend. The remaining £1,000 of each dividend would be sheltered by the dividend allowance. By having an alphabet share structure, they can tailor the dividends to reduce the total tax bill by £4,284.

Changes to the corporation tax regime come into effect from 1 April 2023 – the start of the financial year (FY) 2023. From that date there will no longer be a single rate of corporation tax; rather, the rate at which a company pays tax on its profits will depend on the level of those profits.

Small profits rate

Companies whose taxable profits are below the lower limit continue to pay tax on those profits at the rate of 19%.

The lower limit is set at £50,000 for a stand-alone company.

Main rate

Companies with profits above the upper profits limit will from 1 April 2023 pay corporation tax at the main rate of 25% on those profits.

The upper limit is set at £250,000 for a stand-alone company.

Availability of marginal relief

Where a company’s profits fall between the lower and upper limits (£50,000 and £250,000 for a stand-alone company), corporation tax is charged at the rate of 25% as reduced by marginal relief. This gives an effective rate of between 19% and 25% depending on where in the band the profits fall.

Marginal relief is calculated by the following formula:

F X (U – A) x N/A

Where:

F is the standard marginal relief fraction

U is the upper limit

A is the amount of augmented profits

N is the amount of the taxable profits.

For the financial year 2023, the marginal relief fraction is 3/200.

Augmented profits are total taxable profits plus qualifying exempt distributions that are received from companies that are not 51% subsidiaries or owned through a consortium.

Where the company has no qualifying exempt distributions (so that A and N in the above formula are the same), the formula can be simplified to:

F x (U – N)

Example

A company prepares accounts to 31 March each year. For the year to 31 March 2024, it has taxable profits of £120,000. It did not receive any qualifying exempt distributions.

It must pay tax of £30,000 (£120,000 @ 25%) less marginal relief.

As the company has no qualifying exempt distributions, the simplified marginal relief calculation can be used.

The marginal relief is therefore 3/200 (£250,000 – £120,000) = £1,950.

The company’s corporation tax bill is therefore £28,050 (£30,000 – £1,950), an effective rate of 23.375%.

Associated companies and short accounting periods

If a company has associated companies, the lower and upper limits are divided by the number of associated companies plus one.

The following table shows the lower and upper limits for companies with between zero and five associates.

Number of associates	Lower profits limit	Upper profits limit
0	£50,000	£250,000
1	£25,000	£125,000
2	£16,667	£83,333
3	£12,500	£62,500
4	£10,000	£50,000
5	£8,333	£41,667

The limits are also proportionately reduced if the accounting period is less than 12 months.

Accounting period straddling 1 April 2023

Where the accounting period straddles 1 April 2023, the profits must be apportioned. Those relating to the period before 1 April 2023 are taxed at 19%, whereas those relating to the period on or after 1 April 2023 are taxed according to the rules set out above, prorating the limits accordingly.