2023 Spring Budget Statement

What was the outcome of the Spring budget and how does this affect you?

The Spring Budget 2023 aims to halve inflation, reduce debt and grow the economy.

Our summary of the key points arising are as follows:

Business Tax:

  • 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 one of two temporary first-year allowances. A 100% first-year allowance for main rate expenditure or a 50% first-year allowance for special rate expenditure;
  • The Government has also confirmed that the 100% first-year allowance for qualifying expenditure on electric vehicle charge-point equipment will be extended until 31 March 2025 for corporation tax, and 5 April 2025 for income tax.
  • Additional R&D tax relief will be available for eligible R&D–intensive SMEs. From 1 April 2023, a new credit rate will be available to loss-making companies whose R&D expenditure constitutes at least 40% of total expenditure.
  • The Chancellor has provided a boost for the UK film and TV industry by increasing tax breaks and maintaining the qualifying threshold. From January 2024, film and TV expenditure credit will be raised from 25% to as much as 34%;
  • Twelve Investment Zones will be established across the UK, with access to £80 million over five years;
  • The maximum sentences for the most egregious forms of tax fraud will be doubled from seven to 14 years;

Personal Tax:

  • The £1.073m lifetime allowance for pensions contributions is to be abolished;
  • The annual allowance will be raised from its current level of £40,000 to £60,000; and, in a move to encourage the over-50’s back to work
  • The annual limit on contributions after pension drawdown will revert to £10,000.
  • The current headline rates of relief for Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums and Galleries Exhibitions Tax Relief (MGETR) are being extended for two years;

Indirect Taxes:

  • The Government will extend the zero rate of VAT on prescriptions for medicines supplied through Patient Group Directions;
  • Fuel Duty will cuts will be extended for a further 12 months;

Other:

  • The Government is introducing changes to the Self-Assessment tax return forms SA108 (Capital gains summary page) and SA905 (Trust and estate capital gains page) requiring amounts in respect of crypto assets to be separately identified.
  • Significant reforms to childcare are designed to remove barriers to work including 30 hours of free childcare for every child over the age of nine months with working parents by September 2025, where eligibility will match the existing 3-4 year-old 30 hours offer;

Contact Us to discuss further how these can affect you!

tax@enhance-professional.co.uk