Budget Highlights 2023

Budget Highlights 2023

The Chancellor presented his Spring Budget on the 15th of March 2023 and we’re here to discuss some of the highlights.

The Economy:

• The OBR expects inflation to fall from 10.7% to 2.9% by the end of 2023.
• UK economy will shrink by 0.2% this year and grow by 1.8% in 2024 and 2.5% in 2025, according to Office for Budget Responsibility forecasts
• From the 1^st of August the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets
• Hunt confirms the Energy Price Guarantee will remain at £2,500 for the typical household for the next three months.
• Fuel duty will be frozen and a 5p reduction will be maintained for a further year.

Businesses:

• Corporation tax for businesses is to increase from 19% to 25% in April as previously announced, firms which make a profit of more than £250,000 will pay 25% tax on their profits from April. According to statistics less than 10% of companies will pay the top rate.
• A new “full expensing” bill, which for the next three years, with an intention to make it permanent, means that for every single pound a company invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profits.
• Smaller businesses increased Annual Investment Allowance to £1m
• Small or medium-sized businesses will be able to claim a credit worth £27 for every £100 they spend if they spend 40% or more of their total expenditure on Research and Development.

Support:

• The Qualifying Care Relief threshold has been doubled to £18,140 which will mean a tax cut for a qualifying carer averaging £450 a year
• The pensions annual tax-free allowance has been increased from £40,000 to £60,000 and the Lifetime Allowance – the amount you can pay into your pension before facing a tax charge – previously set at £1.07m will be abolished.
• Support to be given to 50 plus workers who are looking to return to work after a break – using a newly introduced apprenticeship scheme.

Childcare:

• Incentives to be introduced for new childminders into the industry and further incentives to support parents with additional funded sessions at nurseries, these sessions to cover babies from 9 months.
  • • This will be a phased scheme with the full access to funded sessions being available to all qualifying parents/ children by September 2025.
• For older children the ambition is that all schools will start to offer a wraparound offer, either on their own or in partnership with other schools, by September 2026.

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