Budget

Spring Budget 2023

Chancellor Jeremy Hunt has unveiled the contents of his Spring Budget in the House of Commons. It had a focus on prompting those who have left their jobs to return to the workforce, and boosting business investment.

The UK economy will avoid a recession in 2023 as inflation plunges from recent highs. The Office for Budget Responsibility now predicts the UK will avoid a technical recession - two straight quarters of falling GDP - and that inflation will more than halve by the end of this year.

AIA Resources

Key announcements will be published on this page and Budget coverage will be in the forthcoming issue of International Accountant magazine. AIA Members in Practice also have full access Tolley Tax Library and Online Seminars where all the announcements will be reflected.

Tax Card 2022/23

Announcements from the Spring Budget 2023.

Here's a quick guide to the main announcements from the Spring Budget:

Taxation and Wages

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Cap on amount workers can accumulate in pensions savings over their lifetime before having to pay extra tax (currently £1.07m) to be abolished
Tax-free yearly allowance for pension pot to rise from £40,000 to £60,000 - having been frozen for nine years
Fuel duty frozen - the 5p cut to fuel duty on petrol and diesel, due to end in April, kept for another year
Alcohol taxes to rise in line with inflation from August, with new reliefs for beer, cider and wine sold in pubs
Tax on tobacco to increase by 2% above inflation, and 6% above inflation for hand-rolling tobacco

Energy

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Government subsidies limiting typical household energy bills to £2,500 a year extended for three months, until the end of June
£200m to bring energy charges for prepayment meters into line with prices for customers paying by direct debit - affects 4m households
Commitment to invest £20bn over next two decades on low-carbon energy projects, with a focus on carbon capture and storage
Nuclear energy to be classed as environmentally sustainable for investment purposes, with promise of more public funding
£63m to help leisure centres with rising swimming pool heating costs, and invest to become more energy efficient

Jobs and Work

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30 hours of free childcare for working parents in England expanded to cover one and two-year-olds, in a bid to help them work more
Families on universal credit to receive childcare support up front instead of in arrears, with the £646-a-month per child cap raised to £951
£600 "incentive payments" for those becoming childminders, and relaxed rules in England to let childminders look after more children
New fitness-to-work testing regime to qualify for health-related benefits
Funding for up to 50,000 places on new voluntary employment scheme for disabled people, called Universal Support
Tougher requirements to look for work and increased job support for lead child carers on universal credit
More places on "skills boot camps" to encourage over-50s who have left their jobs to return to the workplace
Immigration rules to be relaxed for five roles in construction sector, to ease labour shortages

Economy and Public Finances

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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
Underlying debt forecast to be 92.4% of GDP this year, rising to 93.7% in 2024

Business and Trade

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Main rate of corporation tax, paid by businesses on taxable profits over £250,000, confirmed to increase from 19% to 25%
Companies with profits between £50,000 and £250,000 to pay between 19% and 25%
Companies able to deduct investment in new machinery and technology to lower their taxable profits
Tax breaks and other benefits for 12 new Investment Zones across the UK, funded by £80m each over the next five years
Reduced paperwork for international traders, who will also be given longer to submit customs forms under streamlined rules

Other Measures

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Commitment to raise defence spending by £11bn over the next five years
Prison sentences for those convicted of marketing tax avoidance schemes
An extra £10m over next two years for charities helping to prevent suicide
Streamlined approvals process promised for new medical products
£900m for new super computer facility, to help UK's AI industry

Further information

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