What Was Announced in the Spring Budget 2023?
On 16 March 2023, the Chancellor, Jeremy Hunt, announced this year’s Spring Budget.
It focused on prompting those who have left their jobs to return to work and boosting business investment.
Among the key changes to note for this year are the following:
- The corporation tax increase announced by Rishi Sunak when he served as the Chancellor pushes the rate to 25%.
- The dividend allowance for 2023/24 is cut from £2,000 to £1,000.
- The capital gains tax exempt amount is reduced from £12,300 to £6,000 for 2023/24.
- The lifetime allowance (LTA) for pensions has effectively been abolished from 2023/24.
- The annual pension allowance will be increased by 50% to a maximum of £60,000 from 2023/24. In addition to this, the money purchase annual allowance (MPAA) will rise from £4,000 to £10,000.
- Companies investing in new plant and machinery in the three years from 1 April 2023 can claim a first-year allowance of up to 100% of expenditure.
- A new monetary limit for the tax-free pension commencement lump sum (PCLS) will be introduced for 2023/24 of £268,275 (equivalent to 25% of the current standard LTA).
- SMEs that spend 40% or more of their total expenditure on R&D can claim a tax credit worth £27 for every £100 they spend from April 2023.
- Up to 30 hours of free childcare will be available to working parents of children from the age of nine months by September 2025. Initially, from April 2024, working parents of two-year-olds will be able to access 15 hours of free childcare per week.
- The energy price guarantee is maintained at the current £2,500 level until the end of June 2023.
- Finally, most main tax allowances and reliefs remain frozen at their 2022/23 levels, except for the reduced threshold for additional rate taxpayers, which is cut to £125,140 for 2023/24.
You can download our full Budget Summary here.
If you have any questions about the summary’s contents or how the Budget may you, please contact us.