The Chancellor, Jeremy Hunt, announced the details of the Spring Budget on 15th March 2023. The highlights of the budget are detailed below.
Corporation Tax
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The increase in corporation tax was announced in the Autumn Statement. These changes were confirmed in the Spring Budget. From 6th April 2023 the main rate of corporation tax will be 25% on profits over £250,000, with a marginal rate of 26.5% of profits between £50,000 and £250,000. Companies with profits up to £50,000 will be taxed at 19%.
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The super deduction for capital expenditure comes to an end on 31st March 2023 as expected.
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However, a 100% first year allowance for qualifying capital expenditure is being introduced from 1st April 2023 for three years. There is no upper limit. Previously annual investment allowance would have been used, but this was capped.
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In reality this will make no difference to 99% of businesses, as the annual investment allowance was capped at £1,000,000, and 99% of business don’t spend up to that on capital expenditure each year.
VAT
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VAT registration thresholds will remain frozen at £85,000 for registration and £83,000 for deregistration until 31st March 2026.
Personal Tax
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No significant changes. Mostly just confirmed the changes that were announced in the Autumn Statement.
Pensions
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The annual allowance that can be put in to a pension fund increases from £40,000 to £60,000 from April 2023.
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The Lifetime Allowance for pensions will be abolished from 6th April 2023. It was capped at £1,073,100, and benefits drawn on a pension over that size were subject to a tax charge. There is no limit to the amount you can have in a pension fund from 6th April 2023.
Capital Gains Tax
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As expected just confirmation of the annual exempt amount being cut from £12,300 to £6,000 for 2023/24 and to £3,000 for 2024/25. This was announced in the Autumn Statement.
Childcare
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From April 2024 working parents of 2 year olds will be able to access 15 hours of free childcare per week.
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This will be extended to working parents of 9 month to 2 year olds from September 2024.
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From September 2025 all eligible working parents of children aged 9 months up to 3 years will be able to access 30 free hours per week.
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These provisions will apply for 38 weeks per year.
If you have any questions or want to understand how the budget impacts you and your business please contact us here.
