Spring Budget 2023 Main Key Takeaways
Published / Last Updated on 17/03/2023
The Chancellor offered his Spring Budget on 15th March 2023 with the plan for the Four Es of Economic Growth and Prosperity: ENTERPRISE, EDUCATION, EMPLOYMENT and EVERYWHERE.
You will no doubt have already seen many of the changes but here are a few that we picked out alongside the 4 videos we have already done for pensions and allowance changes:
AA & LTA MTAA MPAA TFC PCLS Cap
Recession and Inflation
- The Office for Budget Responsibility confirmed that UK will not enter recession this year and inflation will likely fall as expected later this year and next.
Energy Price Cap
- The £2,500 pa (average household consumption) energy price cap that was due to end in April 2023 and increase to £3,000 will be extended for a further 3 months taking us into July before the price cap goes up.
Free Childcare Extended (but not until 2024)
- Currently for children aged 3-4 years – up to 30 hours free childcare per week subject to 38 weeks school term time or may be free childcare for up to 52 weeks if you use less than 30 hours per week.
- April 2024 – all children over age of 2 to have access to 15 hours free childcare per week.
- April 2025 – all children over 9th months old to have access to 30 hours free childcare per week.
- Note: You are not eligible if you work less that 16 hours per week or earn over £100,000 pa.
- All the above measures are clearly designed to help more parents stay in work or become economically active and return to work.
- In addition, with more younger parents getting support and work, this will boost economic output, boost tax revenue, and of course make mortgages more affordable for young parents if they are able to work.
Fuel, Alcohol and Cigarettes Duties
- Fuel duty to be frozen for another 12 months (rather than the 11% + VAT planned increase). This should help bring inflation down as fuel prices fall anyway.
- Alcohol duty up in August for bottled/canned products etc) but a so-called ‘Draught Duty’. This increase relief on duty moving 5% to 9.2% for qualifying beer and cider products and from 20% to 23% for qualifying wine, other fermented products (previously made from wine) and spirits to offer some support to the hospitality industry.
- Cigarette duties will still rise.
- We cannot see the above making any huge impact of costs of living but if you are a driver or pub ‘goer’, then the news is not bad.
Corporation Taxes
- The corporation tax rate rises from 19% to 25% for businesses with profits in excess of £250,000 will remain.
- Full expensing of capital allowances i.e., business spend e.g., on capital development or capital investment in plant and machinery will be allowed at 100% full expenditure on capital items.
- This is clearly designed to encourage businesses to invest and growth.
Levelling Up
For many areas around the UK with the exception of what appears to be London, South, South East and South West
- 12 Investment Zones (think of these like 12 Canary Wharf’s)
- £200m for regeneration projects
- £400m for levelling up projects.
