The Chancellor, Jeremy Hunt, delivered the Spring Budget on 15 March 2023. The key announcements are summarised below.
Individuals
- The pensions Lifetime Allowance charge will be abolished from 6 April 2023
- The Lifetime Allowance itself will be abolished altogether from 6 April 2024. The allowance is currently £1,073,100
- The pensions Annual Allowance is to be increased from £40,000 to £60,000 from 6 April 2023
- The government is consulting on potential expansion of inheritance tax Agricultural Property Relief
- The higher and top rates of Scottish income tax rates have both increased one percentage point to 42% and 47% respectively, as announced in the Scottish Budget on 15 December 2022
- Other income tax rates and allowances remain as announced in the Autumn Statement on 17 November 2022
- The government has set out plans to encourage taxpayers to engage with HMRC digitally, and to improve online services for PAYE and income tax Self Assessment.
Businesses
- An increase in the corporation tax rate to 25% for companies with profits over £250,000 is to go ahead from April 2023
- ‘Full expensing’ of capital expenditure for companies investing in qualifying plant and machinery between 1 April 2023 – 31 March 2026. This will apply to expenditure in the main rate pool, with special rate expenditure benefitting from a 50% first year allowance
- Annual Investment Allowance (available to unincorporated businesses as well as companies) is confirmed at a permanent rate of £1 million from 1 April 2023
- 12 new Investment Zones throughout the UK, with at least one in each of Scotland, Wales and Northern Ireland. These are designated ‘special tax sites’ and will benefit from a package of different tax reliefs
- Additional support for R&D intensive SMEs through enhanced payable credits, from April 2023
- The restriction of R&D tax relief on certain overseas expenditure has been delayed by a year to 1 April 2024. Other previously announced changes to R&D reliefs will be introduced as planned
- New refundable expenditure credits for film and TV will be introduced from 1 January 2024, with the existing schemes closing to new productions from 1 April 2025. Video games, film and high-end TV will have a credit rate of 34%, with a higher 39% rate applying to animation and children’s TV
- Theatre Tax Relief, Museums and Galleries Exhibitions Tax Relief and Orchestra Tax Relief will continue at their current rates until 1 April 2025
- Social Investment Tax Relief (SITR) will not be renewed and will be closed to new investments from 6 April 2023.
“With the turmoil of last autumn fresh in the memory, this was never going to be a Budget full of headline-grabbing tax reductions. The Chancellor’s focus on encouraging growth and helping the ‘economically inactive’ back into work translated, from a tax point of view, into a handful of significant, and a raft of more minor, announcements.
“This did not include reversing the increase in corporation tax rates, with the government banking instead on the introduction of a (temporary) full expensing regime for capital expenditure to promote growth.
“On the personal tax side the most significant announcements were around changes to the pension tax regime to encourage those who have already reached the Lifetime Allowance back into the workforce.”
Robert Langston, National Tax Partner
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