Spring Budget 2023

Tax and Income

• The government is introducing full expensing of Capital Allowances. This won’t be a massive change for many micro and small businesses as the annual allowance is already at £1 million(!), but companies incurring qualifying expenditure on the provision of new plant and machinery on or after 1‌‌‌ April‌‌‌ ‌2023 (but before‌‌‌ ‌1‌‌‌ April‌‌‌ ‌2026) will be able to claim new temporary first-year allowances. These allowances are: 100% first-year allowance for main rate expenditure and a 50% first-year allowance for special rate expenditure.
• A new credit rate will be available to Research and Development (R&D) intensive companies whose R&D expenditure constitutes at least 40% of total expenditure. Qualifying companies will be able to claim a payable credit rate of 14.5% for qualifying R&D expenditure with the changes taking effect from 1‌‌‌ ‌April‌‌‌ ‌‌‌‌2023
• The Spring Budget has removed the pensions Lifetime Allowance (LTA) and has also increased the Annual Allowance from £40,000 to £60,000 per person. These changes will take effect from April‌‌‌ ‌2023 and should incentivise workers to save more and work more – especially those in highly-skilled occupations
• Taxpayers will no longer be able to legally assign their income tax repayments to a third party such as an agent. These changes apply UK-wide and mean that assignments of income tax repayments received by HMRC on or after the‌‌‌ ‌15 ‌‌‌ ‌March 2023 will be legally invalid
• In an interesting announcement, all children between the ages of nine months and four years will be entitled to 30 hours of free childcare per week (if each of their parents are working 16+ hours per week) and will be rolled out across the country up to April 2025. This will further enable those parents who want/need to go back to work after having children and should be a massive boost for those in the childminding and nursery industries

Indirect Tax

• The cut in the rates of Fuel Duty introduced in the Spring Statement in March‌‌‌ ‌2022 will be extended for a further 12 months
• The government have also announced that there will be a new structure for Alcohol Duty. The new Draught Relief is being increased from 5% to 9.2% for qualifying beer and cider products and from 20% to 23% for qualifying wine, spirits-based and other fermented products and will take effect from‌‌‌ ‌1 August‌‌‌ ‌2023
• The Energy Price Guarantee, which caps how much suppliers can charge per unit of energy used, will stay in place until June 2023 with a value of £2,500 per year

If you’d like help with any of the above changes then please get in touch!