Spring Budget 2023 – What You Need To Know
The Spring Budget 2023 sets out to deliver on three of the five key priorities set out by the Prime Minister in January: to halve inflation, grow the economy and get debt falling. But what does this mean for you and your business?
Getting People Back To Work
As the government tries to build up the workforce after its decline in the past few years, they are implementing the following:
- Childcare – Parents of children from nine months to three years will be offered 30 hours a week of free childcare during term time, with both parents working at least 16 hours a week, and this will be gradually phased in. Additionally, Universal Credit claimants will be able to receive childcare funding whilst local authorities will be given more funding for wraparound care and more free nursery places.
- Employment – The work capability assessment will be scrapped and benefit sanctions for those on Universal Credit and not searching for work will be applied more rigorously.
- There will be a new apprenticeship, called “returnerships”, for over-50s wanting to return to work in a new sector, Hunt additionally stated he will raise the annual limit on tax-free pension contributions from £40,000 to £60,000 and abolish the lifetime cap, to tempt higher-paid older workers to remain in the workplace.
Cost of living
Hunt confirms that the energy price guarantee will remain at £2,500 until July, effectively capping household costs. However, the energy rebate scheme, paid directly to customers in six instalments of £66/67, has not been extended and will end this month.
The Chancellor confirmed that the main corporation tax rate will increase from 19% to 25 with effect from 1 April 2023 but an “enhanced credit” has been introduced for small and medium-sized businesses. If a business of this size were to spend 40% or more of its total expenditure on research and development, it can claim credit worth £27 for every £100 spent
Investment Zones –
Twelve new investment zones or “potential Canary Wharfs” will be eligible for £80m in funding to boost business there. The ones in England include the West and East Midlands.
The amount that an individual can contribute tax-free to their pension fund is to be raised from £40,000 to £60,000. For those who are already drawing down on their pension, the total amount they can save tax-free under the Money Purchase Annual Allowance is to be increased from £4,000 to £10,000 from April 2023.