Spring Budget 2023
The chancellor presented his budget on 15th March 2023 but most announcements had been made in advance to the press. Here are the highlights under his “E” themes.
The Energy Price Guarantee for households is to stay at £2,500 for the next 3 months, then increase to £3,000 until March 2024. The Energy Bills Discount Scheme for business is also extended to March 2024.
There is to be energy funding for leisure centres.
Fuel duties are to be frozen for a further year.
There is to be a new Draft relief, i.e. lower duty on alcohol served in pubs, but general alcohol duties rise with inflation from August.
The current 30 hours free childcare for 3–4-year-olds is to be extended to start at age 9 months.
- To be available if all adults in the household work over 16 hours a week
- It is to be phased in from April 2024 to September 2025
Those on universal credit to get childcare payments up front and an increase.
Minimum carer to child rations to be dropped to 1:5.
Incentives are to be paid for joiners to childcare.
All primary schools to offer wraparound care from 8am to 6pm by September 2026
There is to be a revamp of sickness & disability benefits such that they may be paid alongside employment, for those seeking work.
Also a new occupational health subsidy for employers to help those who might otherwise lose their jobs.
Increased assistance for care leavers to enter a qualifying career.
Universal credit is to have working hours increased from16 to 18 hours, and work search criteria made more rigorous.
Funding for 10 organisations to trial and develop Midlife MOT’s; designed to help workers with planning for work, wellbeing and money and also DWP understanding.
New Returnerships – offering Skills Bootcamps, Apprenticeship schemes, and Sector-based Work Academy Programmes (SWAPS) to the over 50’s to change careers or get back to work.
Big changes for pensions
- Annual allowance for contributions raised from £40,000 to £60,000.
- Allowance for those drawing a pension raised from £4,000 to £10,000.
- Allowance taper starts for incomes over £260,000, up from £240,000.
- Minimum tapered allowance increased from £4,000 to £10,000.
- Lifetime allowance is being removed, with charges for exceeding it removed as of April 2023
- But warning – 25% tax free drawdown is now capped at higher of £268,275 (25% of current lifetime allowance) or 25% of your protected amount i.e. adding to your pension STILL has negative consequences if you had reached the limit, as it cancels your protection.
New full expensing capital allowance to replace the super deduction from 01/04/2023 to 31/03/2026 – same rules as for super deduction but different rates.
- Only for companies
- Only for NEW plant
- 100% first year allowance for general pool qualifying assets,
- 50% first year allowance for special pool qualifying assets.
- Each asset to have own pool.
- Balancing charge on disposal
Annual investment allowance is to remain at £1m for all businesses.
Seed Enterprise Investment Scheme (SEIS) criteria are being relaxed from 6th April 2023
- Increase in investment that can be raised to £250,000
- Increase in asset limit to £350,000.
- Within 3 years of incorporation – up from 2 years
- Annual investor limit doubled to £200,000
Research & Development
The two current schemes are slowly being merged with big rate changes announced from 1st April 2023.
The main research and development credit (RDEC)
- increased from 13% to 20%
But for the small company (SME) scheme
- enhancement reduced from 230% to 186%
- credit reduced from 14% to 10 % unless 40% of the company activities are R&D
Please note the new requirement to advise HMRC in advance, within 6 months of the end of the year, that a claim is likely to be made for that year, before a claim is made.
Other new rules on claims are coming in August 2023.
2 year extension to tax reliefs introduced because of covid for Theatres, Orchestras, Museums & Galleries, along with slower tapering off.
From 1st April 2024 qualifying expenditure will be restricted to UK only from UK or EEA
Film, TV, & video games reliefs to be reformed to 34% tax credits – like R&D – with enhanced 39% credit for Animation and Childrens TV. The new reliefs will be available for periods ended on or after January 2024, and the current schemes will be closing to new productions on 1st April 2025.
12 new investments zones to be created – like old enterprise zones. Businesses operating in these zones will be eligible for enhanced tax reliefs e.g. stamp duty land tax
Following Brexit, various tax reliefs that were available to EEA businesses or property are now being restricted to UK e.g. Agricultural property relief, group loss relief and R&D qualifying spend.
New grants for Carbon Capture Usage & Storage (CCUS)
Nuclear energy to be reclassified as green to be able to benefit from existing grants, reliefs and investment.