On Wednesday 15 March 2023, Chancellor Jeremy Hunt delivered the Spring statement. Below is our summary of the key points.
The free 30 hours of weekly childcare will be extended to cover children from the age of nine months. This will apply to households where both parents are working and will be applicable during the 38 weeks of term-time per year.
Lifetime allowance limit on pensions
The Government plans to abolish the lifetime allowance limit on pensions. The pensions annual tax-free allowance has been increased by 50% from £40,000 to £60,000.
Jeremy Hunt has confirmed the Government will go ahead with the planned increase in Corporation Tax from 19% to 25% in April 2023. He has announced a £9 billion policy of ‘full capital expensing’ for the next three years to allow companies to write off investment against their tax bills. The Chancellor has also announced an ‘enhanced credit’ for research-intensive businesses worth £27 for every £100 invested.
Cost of living support
The Chancellor has announced the energy price guarantee will remain at £2,500 until July 2023. It had been set to rise to £3,000. He has announced a £63 million fund to help leisure centres afford their energy bills and £100 million for charities facing rising costs.
The Chancellor says the 2023 Budget will be for ‘long-term, sustainable, healthy growth’. The Office for Budget Responsibility (OBR) expects inflation to be at 2.9% by the end of this year, meeting the Government’s target of halving it. Jeremy Hunt expects GDP to contract by 0.2% rather than the previous 1.4% predicted that will be followed by growth of 1.8% in 2024, 2.5% in 2025 and 2.1% in 2026.
The Chancellor has announced 12 investment zones across the West Midlands, Greater Manchester, the North East, South Yorkshire, West Yorkshire, East Midlands, Teesside, Liverpool, Scotland, Wales and Northern Ireland.
Small business investment allowance
The Annual Investment Allowance has been increased to £1 million meaning every outlay on IT equipment, plant or machinery can be deducted in full from taxable profits.
Local regeneration projects
The Government will invest £200 million in local regeneration projects in England. £161 million will be made available for mayoral combined authorities and Greater London plus £400 million will be available for levelling up partnerships.