Dubbed the ‘back to work budget’ Chancellor Jeremy Hunt claimed his budget will increase the workforce and boost the economy.
A puzzle was also posed by the Office for Budget Responsibility. They predict that the UK will avoid recession in 2023 but the economy will still shrink by 0.2%. Some were left scratching their heads. Are both things really possible?
Our comprehensive guide can be viewed below. But with a focus on business-related announcements, here are the highlights from his hour-long speech:
- Main rate of corporation tax, paid by businesses on taxable profits over £250,000, confirmed to increase from 19% to 25%
- Companies with profits between £50,000 and £250,000 to pay between 19% and 25% corporation tax
- Companies can expense 100% of the costs on qualifying plant and machinery assets from 1 April 2023- 31 March 2026. This will substantially accelerate total tax relief in year 1
- Loss-making SMEs undertaking R&D 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. This only partially softens the blow of the previously announced cuts to the R&D rate for SMEs in general, due to come in from 1 April 2023 (net benefit for profit-makers down from 24.7% to 21.5% and for loss-makers down from 33.35% to 18.6%) and only for those “R&D-intensive” businesses. Everyone else will suffer the new, lower rates. See our previous article, written by Head of R&D Chris, for more information on the rate changes.
- Tax breaks and other benefits for 12 new Investment Zones across the UK, funded by £80m each over the next five years
- Reduced paperwork for international traders, who will also be given longer to submit customs forms under streamlined rules
- VAT exemption to be extended to services carried out by staff directly supervised by registered pharmacists
- HMRC is inviting views on a potential further extension of VAT relief for energy saving materials
- £20bn invested over next two decades on low-carbon energy projects, with a focus on carbon capture and storage
- Nuclear energy to be classed as environmentally sustainable for investment purposes
- The lifetime allowance for pension savings is to be scrapped with effect from 6 April
- Annual allowance for pension contributions to rise from £40,000 to £60,000
- Fuel duty frozen
- Boost for pubs. From August, alcohol taxes in pubs to be 11p in the pound lower than the rate in supermarkets
- Household energy bills subsidy extended for three months, until the end of June
- Jobs and work-related initiatives – childcare subsidies and support for families. Benefits changes to encourage work and provide support for people with disabilities and over 50s.
DEVIL IN THE DETAIL?
Read our comprehensive guide to the highs and lows of the 2023 Spring Statement HERE
