Spring Budget 2023: Key Takeaways for Businesses and Individuals
The Chancellor has unveiled a new budget aimed at promoting long-term, sustainable, and healthy growth in the country. In this blog post, we’ll explore the key measures announced, which range from changes in corporation tax to adjustments in research and development tax reliefs.
Corporation Tax Changes
From April 2023, the corporation tax rate will increase to 25% for companies with over £250,000 in profits. However, companies with profits between £50,000 and £250,000 will benefit from a reduced tax rate.
Annual Investment Allowance
The Annual Investment Allowance has been confirmed at a permanent rate of £1 million from April 2023.
Introducing Full Expensing Deduction
A new ‘Full Expensing’ deduction will be available from 1 April 2023 until 31 March 2026, allowing companies to claim a 100% first-year deduction on qualifying new main-rate plant and machinery investments.
Research and Development Tax Relief Changes
Starting from 1 April 2023, various changes will be implemented in research and development (R&D) tax reliefs.
Pensions Reform
The lifetime pension allowance charge will be removed from April 2023, and the pension annual allowance will increase from £40,000 to £60,000.
Theatre Tax Relief Extension
Theatre Tax Relief rates will remain at 45% and 50% until 31 March 2025.
Income Tax Rates and Allowances
Income tax rates and allowances will be maintained at their current levels until April 2028.
National Living Wage Increase
From 1 April 2023, the National Living Wage will increase to £10.42 an hour for those aged 23 and over.
Dividend Allowance Reduction
The dividend allowance will be reduced from £2,000 to £1,000 from April 2023 and further reduced to £500 from April 2024.
Capital Gains Tax Exemption Reduction
The annual exemption amount for capital gains tax will be reduced from £12,300 to £6,000 from April 2023 and then to £3,000 from April 2024.
Stamp Duty Land Tax (SDLT) Cuts Extension
SDLT cuts for England and Northern Ireland will remain in place until 31 March 2025.
Help with Childcare Costs
A phased package of support has been announced for help with childcare costs for accessing 30 hours of childcare for children over nine months old.
Government Grants for Electric Vehicle Charge Points
The government has extended the 100% First Year Allowance for electric vehicle charge points to 31 March 2025 for corporation tax purposes and 5 April 2025 for income tax purposes.
VAT Updates
No further changes to the VAT thresholds have been announced.
Help for Energy Costs
The current Energy Price Guarantee will now be extended to 30 June 2023.
Business Rates Revaluation
The planned revaluation for business rates in England will proceed in April 2023.
Plastic Packaging Tax Rate Update
The government will uprate the Plastic Packaging Tax rate in line with the Consumer Price Index (CPI) from 1 April 2023.
Recovery Loan Scheme Extension
The Recovery Loan Scheme, launched in April 2021 to help businesses recovering from the pandemic, has been extended to 2024.
Additional Resources for HMRC
The government is investing a further £47.2 million to improve HMRC’s capability to collect tax debts and support those temporarily unable to pay. However, no announcement has been made on additional resources to improve the current service levels impacting businesses and their agents.