15 March 2023

The Chancellor referred to his announcements today as a “Budget for Growth”, which some may view as somewhat surprising given that the OBR’s updated forecast predicts that the UK economy will contract by 0.2% this year. On a more positive note, the OBR believes that the UK economy will now avoid a technical recession (of two consecutive quarters of negative growth) and the economy will expand by 1.8% next year and 2.5% in 2025.

The media build up to today’s Budget had called it a “back to work Budget” and as expected the Chancellor announced a range of measures that targeted the over-50s, parents with young children and the long term sick and disabled. Only time will tell how many of the estimated 7 million adults of working age who are not in work, will return to work and fill the current 1 million job vacancies.

Jeremy Hunt had largely boxed himself into a corner with the previously announced corporation tax rate increase from 19% to 25% but tried to reduce its impact by announcing a new “full expensing” capital allowances regime for companies. This new regime has a lot of similarities to the current 130% super-deduction capital allowances scheme (which ends on 31 March 2023) including being very expensive for the government at a cost of £9 billion per annum.

There were very few other new tax announcements, but perhaps the rabbit out of the hat was the surprise that the pensions LTA (Lifetime Allowance) of £1.07m was completely abolished. The expectation was that the LTA would increase back to its former level of over 10 years ago of £1.8m, but its complete removal is very welcome as it simplifies what has become a very complex area of the tax/pensions legislation. Many of us can remember Gordon Brown announcing a new Pensions Tax Simplification regime back in 2006 and after almost 20 years it may now have finally arrived!

The Spring Budget 2023 announcement includes information which covers:

  • Income Tax & NIC
  • Corporation Tax
  • Capital Allowances
  • Capital Gains Tax
  • Childcare and Supporting People in Work
  • Research & Development and Creative Industries
  • Pensions & Investments
  • Trust & Estates
  • Inheritance Tax
  • Duties

Please click here to read and download our Spring Budget 2023 highlights as a PDF.

If you have any queries on the Spring Budget 2023 please do not hesitate to contact one of our tax specialists on 01228 530913 or 01768 864466.