Jeremy Hunt delivered his first budget to the House of Commons yesterday. In the Spring budget, he covered three key areas that Rishi Sunak has prioritised: halving inflation, growing the economy, and reducing debt. These announcements included the news that the UK will avoid a recession in 2023.
There were a number of announcements that will affect businesses in the budget. The Corporation Tax rise was confirmed- meaning that businesses who earn more than £250,000 will pay 25% Corporation Tax, up from 19%. You can read more about the CT rises here. Also on business taxation, there will be a new policy of ‘full expensing’ for next three years, with intention to make it permanent. With this, businesses will be able to obtain relief on all of the investments they make.
There was also an announcement of a £1.8 billion package of support and enhanced credit for SMEs that spend on research and development, which will presumably replace the Super-Deduction Tax.
Other key announcements of the Spring budget
- Inflation in UK will fall from 10.7% in 2022 to 2.9% by the end of 2023
- Energy Price Guarantee will remain at £2,500 for next three months
- 12 new Investment Zones confirmed – ’12 potential Canary Wharfs’. These are West Midlands, Greater Manchester, the North-East, South Yorkshire, West Yorkshire, East Midlands, Teesside and, once again, Liverpool. There will also be at least one in each of Scotland, Wales and Northern Ireland. If chosen, areas will have access to £80m of support
- Pre-payment meter charges brought in line with comparable direct debit charges
- Abolish lifetime allowance for pensions (previously £1.07m)
- Annual tax free pension allowance of £40k is to be increased to £60k per annum
- £200m invested in local regeneration projects across England
- £161m for regeneration projects in Mayoral Combined Authorities and the Greater London Authority
- Climate Change Agreement scheme extended for two years
Read more of the announcements and our thoughts on the Spring budget here.
Budget announcements can be confusing, and it’s difficult to keep up with the ever-changing economy, so to find out more about how the budget may affect you, or if you have any other questions about the announcements, contact the Sapphire team today.
