Well, that was a bit of a calmer budget for businesses. It always was going to be a little dull after a few turbulent years though. In our latest blog, Helen breaks down the highlights of the budget 2023 and what it may mean for you…
The budget was very political in my opinion. It appears geared towards the swing voters who may be tempted to vote for the government who gives them the most money, or those who may have gone to Labour following the fracas of the past few years. So, what are the highlights?
- The lifetime allowance for pensions will be abolished from April 2024, with the lifetime allowance charge withdrawn from April 2023.This should mean that the wealthiest earners, such as NHS consultants, may be likely to stay in work for longer.
- A new monetary limit for the tax-free pension commencement lump sum will be introduced for 2023/24 of £268,275. This isequivalent to 25% of the current standard lifetime allowance.
- The annual allowance for pensions will increase by 50% to £60,000 from 2023/24. The money purchase annual allowance will rise from £4,000 to £10,000 from 2023/24.
- 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%
- Companies able to deduct investment in new machinery and technology to lower their taxable profits
- Companies investing in new plant and machinery in the three years from 1 April 2023 can claim a first-year allowance of up to 100% of expenditure.
- Small and medium-sized enterprises that spend 40% or more of their total expenditure on R&D can claim a tax credit worth £27 for every £100 they spend from April 2023.
- Commitment to invest £20bn over next two decades on low-carbon energy projects.
- Nuclear energy to be classed as environmentally sustainable for investment purposes, with promise of more public funding
- £63m to help leisure centres with rising swimming pool heating costs, and invest to become more energy efficient
Fuel, Alcohol & Tobacco
- Fuel duty frozen – the 5p cut to fuel duty on petrol and diesel, due to end in April, kept for another year
- Alcohol taxes to rise in line with inflation from August, with new reliefs for beer, cider and wine sold in pubs. Good news for some of our clients!
- Tax on tobacco to increase by 2% above inflation, and 6% above inflation for hand-rolling tobacco
In an effort o encourage parents to return to work following maternity leave, the Chancellor announced 30 hours of free childcare for working parents in England. This has expanded to cover one and two-year-olds from April 2024. This could be great news not only for the parents, but for businesses with employees who simply cannot afford to come back due to the high cost of childcare.
Understanding the Budget 2023
As we said, a bit calmer, no real surprises in the budget and even time to talk about potholes (send someone to Bakewell please Mr Hunt!). If you are concerned about how the budget may affect you and your business, get in touch today so that we can help!