The run-up to the event appeared deliberately downplayed, save for a late flurry of leaks highlighting a focus on childcare at one end of the scale and pensions at the other. While acknowledging the Prime Minister’s two objectives of halving inflation and reducing debt, Mr Hunt focused his Spring Budget on the Prime Minister’s third objective – getting the economy going.
The highlights include:
- Companies investing in new plant and machinery in the three years from 1 April 2023 can claim a first year allowance of up to 100% of expenditure.
- The lifetime allowance (LTA) for pensions has effectively been abolished from 2023/24 but the 25% tax free commencement lump sum will be restricted to the value of 25% of the current LTA.
- The annual allowance for pensions will increase from £40,000 to £60,000 from 2023/24 and the money purchase annual allowance will increase from £4,000 to £10,000.
- Up to 30 hours of free childcare will be available to working parents of children from the age of nine months from September 2025. Initially from April 2024, working parents of two-year-olds will be able to access 15 hours of free childcare per week.
- The energy price guarantee is maintained at the current £2,500 level until the end of June 2023.
- The scheduled 11p a litre duty increases in petrol and diesel will not go ahead.
- SMEs that spend 40% of more of their total expenditure on R&D can claim a tax credit worth £27 for every £100 they spend from April 2023.
- The Office for Budget Responsibility forecasts that the CPI inflation rate will fall from the current 10.1% (January 2023) to just 2.9% by the end of the year.
We trust that you find the enclosed Budget Summary useful and that it is a helpful basis for a discussion with us about your financial future.