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Budget Summary: Spring 2023

There are Daffodils on the ground, blossom on the trees and it's still daylight at 5 PM...Spring is definitely on its way!


Chancellor Jeremy Hunt announced his government's plans in the Spring Budget today (15th March 2023). calling it a budget for growth.


Here are my key takeaways:


The UK economy is on the right track after the Chancellor's Autumn 2022 budget and will now NOT enter a technical recession this year (2023). They plan to reduce inflation by more than 50% and reduce borrowing.


OBR predictions are that inflation will fall from 10.7% (as it was in Quarter 4 of 2023) to 2.9% (by the end of 2023). This may help to relieve some of the pressure many households and businesses are facing.


Energy Prices

Announced earlier this week but confirmed today, the £2,500 cap for typical use has been extended for another 3 months to June 2023 with prices to then drop from 1st July 2023. If you have a pre-payment meter, you will be pleased to hear that charges are to be brought in line with those who pay by Direct Debit.


The Great British Pub

In previous budgets, alcohol duty has been frozen and many expected this to happen again in the Spring 2023 budget, but the Chancellor went one step further and announced that from 1st August 2023, each pint of draught ale, beer and cider will have an 11p duty deduction. I wait to see if that cut will be passed on to customers.


Fuel

Fuel Duty is another tariff which has been frozen and had a 5p cut in previous budgets to help with the rising costs of petrol and diesel. Today, the Chancellor announced that fuel duty, together with the current 5p cut will be extended for a further 12 months.


Potholes

I was pleasantly surprised when the Chancellor announced the current £500 million per year fund for repairing the dreaded pothole has been increased to £700 million per year.


Business Support

The Chancellor quoted 2 statistics which I feel are worth mentioning:

- Since 2010, the are 1 million more businesses in the UK

- The UK is the best place in the world for female entrepreneurs


The Climate Change relief has been extended for 2 years in order to help businesses with their energy costs.


The R&D Tax Credit Scheme has been reformed and if eligible (40% or more expenditure on research & development), businesses can claim an extra £27 tax relief for every £100 spent.


The Super Deduction from limited companies ends on 31 March 2023. The Chancellor announced today that this will not be the end. Instead, the Super Deduction will be replaced by Full Capital Expensing where 100% of the cost of eligible IT equipment, plant & machinery purchases can be deducted from your tax.


Audio & Visual Company reliefs have been extended. This includes high-end (£1 million +) TV, children's TV, theatres, film and more.


Employment

The Chancellor announced a Disability Benefits reform due to the increase in work-from-home vacancies/job roles. A voluntary scheme is being rolled out named Universal Support aims to support disabled people find suitable work.


For people aged 50+, a new type of apprenticeships named 'returnships' are being planned to encourage workers to return to work.


Pensions

The big news from the Spring Budget 2023 is that the Pensions Annual Allowance is being raised from £40,000 to £60,000. The Lifetime Allowance has been abolished altogether.


Childcare

This had been mentioned in the news in the run-up to the Spring Budget but we got some more details and confirmation that all children under 5 will get 30 hours free childcare, if eligible. This will be a staggered approach with 3 & 4 year olds already receiving 30 hours. From April 2024, 2 year olds will receive 15 hours. From September 2024 all children from 9 months will receive 15 hours and all children from 9 months - 4 years will get the full 30 hours free childcare from September 2025.


Summary

Overall, this budget is as to be expected and it is great news that we will not enter a technical recession in 2023. The Chancellor described it as:

Autumn Budget - Stability

Spring Budget - Growth


Stephanie









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