Spring Budget 2023
A summary of the key announcements:
Personal tax
Pension tax relief
- The amount that an individual can contribute to their pension pot tax free will be raised from £40,000 to £60,000 per annum from April 2023.
- For those who are already drawing down on their pension, the total amount they can save tax free under the Money Purchase Annual Allowance is to be increased from £4,000 to £10,000 from April 2023.
- The Lifetime Allowance of £1,073,100 to be abolished.
Business tax
Corporation tax
- It was confirmed that the main corporation tax rate will increase from 19% to 25 from 1 April 2023.
Capital Allowances
- The super-deduction regime will end 31 March 2023 and will be replaced from 1 April 2023 with ‘full expensing’ – 100% capital allowances for qualifying plant and machinery. This will last for three years, to 31 March 2026. The Government will also introduce 50% first year allowances for ‘special rate’ plant and machinery, including long life assets. These rules apply only for corporation tax purposes, and will not be available for businesses which are subject to income tax, unless they are below the Annual Investment Allowance threshold of £1m per annum.
- It was 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.
Other taxation
- Fuel duty will be frozen and a 5p reduction will be kept for another year.
- Alcohol taxes will rise in line with inflation from August 2023 (with new reliefs for beer, cider and wine sold in pubs).
- Tax on tobacco will increase by 2% above inflation, and 6% above inflation for hand-rolling tobacco.
- Nuclear energy to be classed as environmentally sustainable for investment purposes.
- £63m to help leisure centres with swimming pool heating costs, and invest to become more energy efficient.
Cost of living support
- The Energy Price Guarantee for households will continue at the current rate for three further months to June 2023, limiting the typical household energy bill to £2,500 per annum. The Energy Bills Relief Scheme, which supports businesses and other non-domestic energy users, is to be replaced by the Energy Bills Discount Scheme through to 31 March 2024.
For a more executive summary, please visit HMRCs website –
https://www.gov.uk/government/publications/spring-budget-2023/spring-budget-2023-html