Spring Budget 2023 overview

Business

• Energy Bill Discount Scheme announced to provide a discount to eligible businesses until 31st March 2024
• Corporation tax increased from 19% to 25% on taxable profits over £250,000
  • companies with profits between £50,000 and £250,000 to pay between 19% and 25%
• Capital allowances - from 1st April 2023 until 31st March 2026, investments in qualifying plant and machinery will qualify for a 100% first-year allowance for main rate assets, lowering eligible business’s taxable profits
  • Companies investing in special rate (including long life) assets will also benefit from a 50% first-year allowance in the year of investment
• Film, TV and video games tax reliefs - these tax reliefs will become expenditure credits instead of additional deductions from 1st April 2024. The new Audio-Visual Expenditure Credit will replace the current film, high-end TV, animation and children’s TV tax reliefs.
• VAT relief for energy saving materials - the government has published a call for evidence on options to reform the VAT relief for the installation of energy saving materials in the UK

Investment & Innovation

• Additional tax relief for R&D intensive SMEs - from 1st April 2023, a higher rate of relief for loss-making R&D intensive SMEs will be introduced
• Delay to restrictions on overseas expenditure in R&D tax reliefs - the previously announced restriction on some overseas expenditure will now come into effect from 1st April 2024 instead of 1st April 2023
• The government will launch a Long-term Investment for Technology and Science (LIFTS) scheme aimed at investing in cutting-edge companies
• The government will extend the British Patient Capital programme (a commercial subsidiary of the British Business Bank) for a further 10 years until 2033-34 and increase its focus on R&D intensive industries. This will bring at least £3 billion government investment across key industries including life sciences, Net Zero and deep tech.
• Commitment to invest £20 billion over next two decades on low-carbon energy projects, with a focus on carbon capture and storage

Workforce / labour market

• 30 hours of free childcare for working parents in England expanded to cover one and two-year-olds, to be rolled out in stages from April 2024
• New voluntary employment scheme for disabled people and those with long-term health conditions in England and Wales, called Universal Support
• Immigration rules to be relaxed for five roles in construction sector, to ease labour shortages
• Returnerships - a new offer promoting existing skills interventions to the over-50s, focusing on flexibility and previous experience to reduce training length
• A £63 million investment aims for an additional 8,000 Skills Bootcamps in 2024-25 in England and 40,000 new Sector-Based Work Academy Programme placements across 2023-24 and 2024-25 in England and Scotland
• WorkWell Partnerships Programme pilot scheme - aimed at providing wraparound health support for jobseekers, benefits claimants and those at risk of falling out of work because of their health condition
• Employment support programme for Ukrainians - the government will provide £11.5 million to help Ukrainians fleeing the war who have arrived in the UK under the Ukraine Visa Schemes to boost their English language skills, enter employment and support their integration into society

Other announcements

• Fuel duty frozen - the 5p cut to fuel duty on petrol and diesel, due to end in April 2023, has been extended for another year
• Government subsidies limiting typical household energy bills to £2,500 a year extended for three months, until the end of June 2023
• £200m to bring energy charges for prepayment meters into line with prices for customers paying by direct debit
• The government will provide up to £15 million local capacity funding to support local authorities along the East West Rail route to maximise economic opportunities
• £100 million of support for charities and community organisations in England. Targeted towards those most at risk, due to increased demand from vulnerable groups and higher delivery costs.

National economy outlook

• Office for Budget Responsibility predicts the UK will avoid recession in 2023, but the economy will shrink by 0.2%
• Growth of 1.8% predicted for next year, with 2.5% in 2025 and 2.1% in 2026
• UK's inflation rate predicted to fall to 2.9% by the end of this year, down from 10.7% in the last three months of 2022

Do you need some business support? Get in touch with our team and they can help with any queries you have. Email [email protected] or call 01494 927130.