News Item - March 2023

A brief summary of the Chancellor's Spring Statement on Wednesday 15th March 2023:

• The Office of Budget Responsibility has reported that the U.K. will not enter recession this year. Inflation is forecast to fall to 2.9% by the end of this year.

• Corporation Tax - increases to go ahead as planned from April. The headline rate will increase to 25% on profits of mare than £250,000.

• Small Business Investment Allowance - to be increased to £1,000,000. 

• Capital Expensing - to be introduced enabling "full expensing". The Chancellor stated that that this will mean that for every pound a business invests in I.T. equipment, plant or machinery; it can be deducted in full and immediately from taxable profits.   

• Energy Support - prepayment meters charges to be brought into line with comparable direct debit charges.

• Annual Pension Allowance and Life Time Allowance - to be abolished. The annual tax free allowance will be increased from £40,000 to £60,000.

• Nursery Fees and Childminders - incentive payments of £600 to be piloted for childminders.

• Funding to be increased for nurseries offering free childcare hours. Minimum staff to child ratios will be reduced to match those in Scotland.

• The existing allowance of 30 hours of free childcare will be extended to children between 9 months and 3 years (3 year olds are already entitled).  To qualify, all adults in the household must work for 16 hours or more a week; no one parent can earn over £100,000 a year under the current scheme. This will be phased in, with 15 hours of free childcare provided to 2 year olds from April 2024.

• Investment Zones - 12 new will be created. These new innovation clusters will be formed by local governments in partnership with a local university, and will receive funding from central government.

• Fuel Duty - will be frozen with the 5 pence reduction maintained for another year.

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Please note that the above report is only our brief interpretation and understanding of the Government's budget proposals for the 2023 Spring Statement, delivered to Parliament by Jeremy Hunt on Wednesday 15th March 2023. These provisions are normally confirmed upon the receipt of Royal Assent later in the year. Jonathan Davis and his associates can not be held responsible for any errors, omissions or changes to the above.