Budget 2023: The Key Announcements and What you Need to Know

Spring Budget 2023

In the Budget of 15th March 2023, the Chancellor Jeremy Hunt, announced several measures under his ‘Four Pillars’ of Enterprise, Education, Employment and Everywhere, aimed at growing the economy.

• The headline rate of Corporation Tax will increase from 19% to 25% from 1 April 2023, for companies with profits over £250,000. Companies with profits between £50,000 and £250,000 will receive marginal relief. Those with profits under £50,000 will pay 19%.
• The £40,000 annual cap on pension contributions per year is to be raised to £60,000 from 6 April 2023.
• The income threshold at which the allowance is tapered will rise from £240,000 to £260,000, from 6 April 2023.
• Removal of the lifetime pension allowance, with the intention to abolish in a future Finance Bill.
• 12 new Investment Zones to drive business investment have been announced.
• Full expensing tax relief on qualifying plant and machinery investment will come in from 1 April 2023 for the next three years, with an intention of becoming a permanent relief.  This will allow businesses to fully offset capital expenditure against taxable profits.
• Annual investment allowance has been increased to £1 million for smaller businesses.
• An R&D tax credit scheme for Companies investing in Cancer research. Qualifying Small/Medium sized businesses spending 40% or more of total expenditure on R&D, can claim £27 credit per £100 spent. Eligible loss-making companies will be able to claim £27 for every £100 of R&D investment.
• Certain restrictions to R&D tax credits due to take effect from 1 April 2023 will be delayed to 1 April 2024.
• An increase for film, high-end television, and video games tax credit to 34%, with the animation and children’s TV sectors increasing to 39%.
• Consultation on reforming certain share options schemes and plans to simplify the granting process for the EMI share option scheme.
• New criminal charges for promoters of tax avoidance.
• A freeze on road fuel duty tax and the recent 5p cut in petrol and diesel duty for 12 months will be retained.
• A duty freeze on average strength draught beer sold in pubs across the UK.
• Increased childcare support for working parents.
• Measures to close the disability gap and help those on long term sickness return to the workforce.

To find out how we can help your business, or if you have any questions regarding the 2023 Spring Budget, please contact us.