Spring Budget 2023
Updated: 15 March 2023, 3.31pm
The chancellor Jemery Hunt today delivered his Spring budget, which has a continued focus on ‘Growth’. Following the Autumn budget, the Office for Budget Responsibility (‘OBR’) has confirmed that the UK is ‘on the right track’ and will not enter a recession in 2023. Inflation is falling and will fall by more than half by the end of the 2023, from 10.7% to 2.9%.
In a time of increasing pressures on families, businesses and the economy, the government has introduced four pillars which will continue the UK’s economic growth which are – Enterprise, Employment, Education and Everywhere.
Everywhere
Investment Zones – 12 new investment zones have been introduced, with at least 1 zone located to be located in each of Scotland, Wales and NIRE, supported with a package of measures worth £80m over 5 years. Investment zones will have access to a package matching that in Freeports, consisting of enhanced rates of Capital Allowances, Structures and Buildings Allowance, and relief from Stamp Duty Land Tax, Business Rates and Employer National Insurance Contributions.
Further investments will be made through regeneration projects, Level-up partnerships and infrastructure funds.
The government plan to transfer some responsibility to local councils and institutions which will speed up decisions on plans for localised growth.
Enterprise
Investments – Full capital expensing will be available for 3 years (with a view to reviewing and extending the measure) on IT equipment and Plant and Machinery. Companies investing in special rate assets (including long life assets) will also benefit from a 50% first year allowance.
Expenditure incurred on plant and machinery for leasing is excluded.
SME R&D Credit – A higher rate of relief for loss-making R&D SMEs will be introduced. SME companies for which qualifying R&D expenditure constitutes at least 40% of total expenditure will be able to claim a higher payable credit rate of 14.5% for qualifying R&D expenditure.
R&D tax review - The government’s consultation on merging the R&D Expenditure Credit (RDEC) and SME schemes closed on 13 March. The government is currently considering the responses and no decision has been made. The government intends to keep open the option of implementing a merged scheme from April 2024
Audio visual – Credits have been increased to 34% for the film, high-end TV and video games sector and 39% for the animation and children’s TV sector.
Employment
Pensions – Annual tax free pension savings allowance increased by 50% from £40,000—£60,000 from 6 April 2023. The government plan to abolish the Lifetime allowance from the same date.
Further announcements for the reform of disability benefits and the announcement of the universal support scheme have been introduced to try and support disabled and vulnerable people into work.
Education
Childcare – 30 hours free childcare will be available for every child over 9 months, for eligible working parents (childcare reform to be introduced in stages).
Further funding will be made available to nurseries and childminder pilot payment incentives introduced to support the announcements.
