The Spring Budget 2023 was Jeremy Hunt’s first budget, the autumn statement was an emergency measure after the catastrophic budget under Liz Truss. The focus was on growth and encouraging employment in particular, rather than overall tax changes.
The economy and support
- The OBR has stated that the UK will not enter a technical recession this year, although there will be a 0.2% reduction
- Inflation will fall to 2.9% by the end of 2023
- The energy price guarantee for households will remain at £2.5k for next 3 months ahead of an expected energy price fall in July
- The planned fuel duty increase will be cancelled maintaining last year's 5p cut for another 12 months
- With high energy prices there will be a £63m fund to keep our public leisure centres and pools afloat
- Under the Brexit Pubs Guarantee with our hands no longer tied by EU, from 1 August draught duty being reduced so it's 11p less than when sold in supermarkets
- Levelling up - 12 new investment zones to be created including West and East Midlands, Wales, Manchester and Liverpool
- An extra £200m to be budgeted for potholes on top of the current £500m annual amount
- Only 10% of companies will pay the full 25% corporation tax rate from 2023/24, but to encourage investment there will be a 3 year full expensing policy meaning all capital expenditure on plant and computers will attract 100% relief in the year of purchase
Energy employment and childcare
- 40% of energy is currently from renewable sources, but nuclear will be necessary to top it up, and expected to produce 1/4 of energy by 2050
- Innovation - support for life sciences, in particular fast tracking medicine approval and also support for AI industries
- Employment – there are currently 1m vacancies and 7m adults of working age not in employment, a number of areas are being targeted to plug this gap
- Disabled people are more able to access workplace using Zoom/Teams and further support is being offered so they access to work without loss of benefits
- £400m plan for mental health and muscular skeletal care to keep people in work who might otherwise leave the workplace
- Of the over 50s, 3.5m are not working so 3 steps are being introduced to help: enhancing DWP Midlife MOT process, a new apprenticeship scheme called "returnerships" for training to return to work with credit for any experience already gained, and in particular to stop doctors leaving NHS (and indeed others in similar positions) for tax reasons, increase pension annual allowance from £40-£60k and abolish the Lifetime Allowance
- To improve the Childcare system there will be incentives for new childminders, support for providers, changes to staff/child ratios and an increase in supply of wraparound care for schools
- And a phased increase to childcare provision to 30 hours for all children over 9 months where all adults are working over 16 hours per week
Many of the Spring Budget 2023 provisions announced were economy wide, but of main interest to business clients will be the extension of capital allowances and increases in pension allowances. As usual the full details of the measures will be released in due course and you should seek professional advice before taking any steps based on these contents. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Shrewsbury, Shropshire – Accountants who “speak your language”