The Chancellor of the Exchequer, Jeremy Hunt, presented the Spring Budget 2023 in the House of Commons earlier today, with a focus on promoting employment and business investment. Here are the key announcements made during the budget:
Tax and Wages
- The cap on pension savings that workers can accumulate over their lifetime before having to pay extra tax will be abolished. This is expected to encourage individuals to save more for their retirement.
- The tax-free yearly allowance for pension savings will increase from £40,000 to £60,000, having been frozen for the past nine years. This will allow individuals to save more towards their retirement without facing additional tax.
- The fuel duty cut of 5p on petrol and diesel, which was set to expire in April, will be frozen for another year. This will provide relief for drivers and businesses that rely on transportation.
- From August, alcohol taxes in pubs will be reduced by 11p in the pound compared to the rate in supermarkets. This is aimed at supporting small businesses in the hospitality industry.
Business and Trade
- The main rate of corporation tax, paid by businesses on taxable profits over £250,000, will increase from 19% to 25%. This is aimed at raising revenue for the government and reducing the deficit.
- Companies with profits between £50,000 and £250,000 will pay between 19% and 25% in corporation tax. This is expected to provide relief for small and medium-sized businesses that have been hit hard by the pandemic.
- Companies will be able to deduct investment in new machinery and technology to lower their taxable profits. This is aimed at encouraging businesses to invest in innovation and new equipment.
- Tax breaks and other benefits will be provided for 12 new Investment Zones across the UK, funded by £80m each over the next five years. This is expected to help to drive economic growth and create new jobs in areas that need it most.
- International traders will benefit from reduced paperwork and longer submission times for customs forms under streamlined rules. This is aimed at making it easier for businesses to trade with the rest of the world and boost exports.
- The 30-hour free childcare scheme for working parents in England now includes one and two-year-olds to help parents work more.
- Individuals who become childminders in England are eligible for a £600 “incentive payment.”
- The government will extend subsidies that limit typical household energy bills to £2,500 a year for another three months until the end of June. This will provide short-term relief for households struggling with the high cost of energy.
- The Chancellor has committed to investing £20bn over the next two decades in low-carbon energy projects, with a focus on carbon capture and storage. This is expected to help the UK to meet its emissions targets and reduce its impact on the environment.
- Nuclear energy will be considered environmentally sustainable for investment purposes, with more public funding promised. This is expected to provide a boost to the nuclear industry and drive innovation in the sector.
- Leisure centers will receive £63m to help with rising swimming pool heating costs and invest in becoming more energy efficient. This will support the leisure industry and reduce its carbon footprint.
The Spring Budget 2023 is aimed at providing support for households and businesses impacted by the pandemic, while also driving innovation and economic growth. The measures announced during the budget are expected to provide relief, create jobs, and stimulate the UK economy.
Keep an eye out for our detailed Spring Budget 2023 document which will be released over the next coming days.
If you have any questions following the recent announcements, get in touch with your BK Plus contact and we’ll be more than happy to help. Alternatively you can contact us here.