Spring Budget March 2023
HUNT FOR GROWTH Jeremy Hunt opened his first full Budget speech by declaring that it was a ‘budget for growth’. He emphasised that this would be ‘long term, sustainable, healthy growth’; after all, Kwasi Kwarteng’s ill-fated September speech at the…
Blog23rd Mar 2023
HUNT FOR GROWTH
Jeremy Hunt opened his first full Budget speech by declaring that it was a ‘budget for growth’. He emphasised that this would be ‘long term, sustainable, healthy growth’; after all, Kwasi Kwarteng’s ill-fated September speech at the same despatch box was titled ‘the Growth Plan’. The Office for Budget Responsibility reported that there is unlikely to be any growth in 2023, but the UK is likely at least to avoid a recession.
After the turmoil of four Chancellors of the Exchequer and three fiscal statements in 2022, it was to be expected that Mr Hunt would try to avoid too many surprises in his Spring Budget. As usual, there was plenty of speculation about what he might do – some people hoped that better than expected tax revenues would encourage him to be generous. In the event, the great majority of the tax announcements had been made in advance, and most of the speech concentrated on spending plans.
Even so, there were some striking headlines on tax: the abolition of the limit on tax favoured pension savings and the introduction of unlimited 100% deductions against profits for company investment in new plant were more generous than most predictions. There were measures to encourage ‘economically inactive’ people back into the workforce, ranging from increasing the provision of free childcare to the introduction of ‘returnerships’ – apprenticeships for people over 50.
The announcement of significant tax changes several times a year, to apply from different dates, makes it hard to keep track of what is changing, when the changes will apply, and how they affect your finances. In this document we have set out the latest proposals and their impact, but also included some significant measures from other earlier announcements as a reminder of their importance. If you would like to discuss what it all means for you, we will be happy to help.
- Personal tax rates and allowances on income and capital gains, and National Insurance Contributions, confirmed for 2023/24 as announced in the Autumn Statement
- Pension savings thresholds significantly increased: from 6 April 2023, Annual Allowance rises from £40,000 to £60,000 and Lifetime Allowance Charge is abolished; maximum tax-free lump sum remains 25% of Lifetime Allowance, i.e. £268,275
- Confirmation of corporation tax rate increase from 19% to 25% from 1 April 2023 on profits over £250,000 and marginal rate of 26.5% on profits between £50,000 and £250,000
- ‘Super-deduction’ for plant and machinery bought by companies up to 31 March 2023 replaced by 100% first-year allowance for qualifying capital expenditure, without upper limit, for three years from 1 April 2023
- Energy Price Guarantee retained at £2,500 for the average household for another 3 months to 30 June 2023
- Significant expansion of free childcare provision to be phased in from April 2024
Full details of the changes announced are covered in our Spring Budget Summary Guide which you can download here. Our AAB Wealth colleagues have also summarised the changes relating to pensions in a summary guide.
Details of the 2023-24 tax rates, changes and other useful information can be found in the downloads below. Our Tax Facts document provides the full detail of the changes for the 2023/24 tax year, whilst the Tax Rates download provides handy tables and notes as a snapshot guide to 2023/24.
If you have any questions our service specialists are here and ready to help, contact a member of the team for more information.