The Chancellor, Jeremy Hunt, delivered the UK Spring Statement on 15th March 2023. What do you need to know about the announcements?
In short, this year’s budget means that not a lot will change for you, unless you’re a relatively well-off near-pensioner or a family with young children! Here is a summary of the key points announced:
We already knew that the main rate for Corporation Tax will increase to 25% from 1st April 2023 (first announced in 2021) but what does this mean in practice? Essentially the Corporation Tax rate will return to a two-tier system from April 2023 when:
- the rate of corporation tax will rise to 25% for companies with profits exceeding £250,000
- companies with profits up to £50,000 will continue to pay 19%
- companies with profits between £50,001 and £250,000 will pay tax at 25% reduced by marginal rate relief rate so that the main rate won’t apply until their profits excess the higher amount
The super-deduction regime will end 31st March 2023, and will be replaced from 1st April 2023 with 100% capital allowances for qualifying plant and machinery. This will last for three years, to 31st March 2026, although the Government indicated that it is their ambition to make this permanent.
It applies to spending on main rate equipment, which includes but is not limited to, warehousing equipment such as forklift trucks, tools such as ladders and drills, construction equipment such as bulldozers and excavators, machines such as computers and printers, vehicles such as tractors, lorries and vans, office equipment such as chairs and desks, and some fixtures such as kitchen and bathroom fittings and fire alarm systems in business premises.
Income tax rates and thresholds
There were no changes to previously announced personal income tax and National Insurance Contribution thresholds or rates.
Pension tax relief
As part of a range of measures aimed at reducing economic inactivity, significant reforms to pension taxation were announced:
- The amount that an individual can contribute tax free to their pension fund is to be raised from £40,000 to £60,000 per annum from April 2023.
- The Government will work to abolish the Lifetime Allowance in future Budgets. It currently stands at £1,073,100.
- For those who are already drawing down on their pension, the total amount they can save tax free under the Money Purchase Annual Allowance is to be increased from £4,000 to £10,000 from April 2023.
INDIRECT TAXES & DUTIES
The government has announced that fuel duty will be frozen and a 5p reduction will be maintained for another year.
Tax on draught products in pubs will be up to 11p lower than in supermarkets.
Energy price support
The Energy Price Guarantee (EPG) will be maintained by the government until the end of June 2023 at the current level of £2,500. They will also align charges so that rates paid are comparable whether the customer pays their electricity bill by direct debit or pre-payment meter.
An expansion in state-funded childcare means that 30 hours of free childcare will be made available for all children under five from April 2024.
There is also a plan for schools to offer wrap-around care either side of the school day by September 2026, to help parents back to work.
For the full Budget Report 2023 visit https://www.gov.uk/government/publications/spring-budget-2023/spring-budget-2023-html
Or to discuss how the Budget Report 2023 will impact you and your business give us a call on 01737 652 852