Chancellor Jeremy Hunt has unveiled the contents of the Spring Budget today, which focuses on prompting people to return to work and boosting business investment. Below is a summary of the Spring Budget 2023.
Spring Budget 2023 Summary
The government led the Spring Budget by claiming that they believe the UK will avoid a recession in 2023; although the economy is due to continue to decrease by 0.2% this year, it will increase by 1.8% next year.
They also confirmed that the UK’s inflation rate is predicted to fall by 2.9% by the end of 2023.
Tax
The cap on the amount that workers can accumulate in pension savings over their lifetime before having to pay extra tax has been scrapped and the tax-free yearly allowance for pensions will rise from £40,000 to £60,000. This is with the hope of encouraging people – such as doctors – to continue to stay in work.
The fuel duty tax has been frozen for another year (previously due to end next month) and, from August, alcohol taxes in pubs will be 11p in the pound – lower than that in supermarkets.
Energy
The Government’s Energy Price Guarantee of subsidising household energy bills to a cap of £2,500 a year was originally due to end next month but will now continue to run until June, and £200 million will be used to bring energy charges for prepayment metres in line with prices for customers paying by Direct Debit.
The government will continue to invest in low-carbon energy projects, with £63 million to be given to leisure centres to allow them to cover increasing costs and become more energy efficient.
Employment
The Spring Budget is focusing heavily on encouraging people to return to work. There will be a new fitness-to-work testing scheme in order for people to qualify for health-related benefits, and there will be tougher requirements for lead child carers to look for work. What’s more, under the name Universal Support, the government will be funding a new voluntary employment scheme for disabled people.
Business
The main rate of corporation tax will increase from 19% to 25% for companies with taxable profits over £250,000, and companies will be able to deduct investment in new machinery and technology, with the aim of lowering their taxable profits.
For international businesses, they will be given longer to submit custom forms, with new streamlined rules to come into effect.
If you want to discuss how these changes will affect you or your business, or if you need business advice, help with business accounting or support on tax, get in touch with our specialised accountants at James & Uzzell today to see how we can help.