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Thursday 16 Mar 23
The Spring Budget was announced on 15 March 2023. In their announcement the government maintained that the UK was still facing significant challenges. High inflation, low growth and debt are all slowing down the economy, so the measures announced today were their attempt to improve conditions for enterprise and boost investment and support.
Here's our roundup of the key points SMEs need to be aware of...
The current 19% tax rate will be maintained for businesses with profits of £50,000 or less, and businesses with profits between £50,000 and £250,000 will pay a marginal rate of tax between 19% and 25%. The rate of corporation tax paid on taxable business profits over £250,000 will rise from 19% to 25% in April 2023.
If you’re looking to invest in new machinery and technology, you may be able to deduct said investments from your taxable profits. Be sure to keep up with our legal updates blog to stay on top of your dates for filing in the new tax year!
The government is continuing with their cuts to the R&D Tax Credit scheme. However, today’s announcement of an enhanced credit for those firms who spend over 40% on R&D will be welcome news.
To find out more about the changes to the UK’s tax system announced in the Spring Budget, the government have published their own factsheet here on .gov.uk
To help drive growth, the government announced tax breaks and other benefits for 12 new investment zones to be created around the UK.
The government also announced plans to increase investment in cutting-edge companies across high growth sectors through a variety of measures, not least the extension of the British Patient Capital fund for a further 10 years to provide at least £3 billion pounds of investment.
The tax-free annual pension contributions cap will be increasing from £40,000 to £60,000. This increase aims to reduce the fears associated with tax hits incurred by people retiring in their 50s.
The Lifetime Allowance charge is set to be abolished from April 2024.
The cap on the amount working people can save in their pensions is also set to be abolished. Currently, workers' savings are capped at £1.07m over their lifetime before they have to pay extra tax.
Energy prices have been falling but still remain high.
The Energy Price Guarantee (EPG) helps households by capping the cost of typical annual energy bills at £2,500.
It had been previously announced that this support would end in April, so this three-month extension to the EPG will be welcome news to anyone who was worried about this support coming to an end.
Currently, working parents can claim for 30 hours of free childcare per week for children aged three and four years old.
From next year, this will be extended – first to cover 15 hours a week for parents of two-year olds from April 2024 and then for parent of nine-month olds from September 2024. Finally, from September 2025 all those aged over nine months will be eligible for the full 30 hours of free childcare.
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