March Budget 2023: Key Points
Chancellor Jeremy Hunt presented his first Budget in the House of Commons today, focusing on “back to work” initiatives and growing the economy.
Here are the key points he made: –
Back to work initiatives
- The current cap on the lifetime amount that can be paid tax free into a pension is to be abolished – currently capped at £1.07m.
- The annual allowance for the amount that can be paid tax free into a pension is to be increased from £40k to £60k.
- The current free childcare provision (30 hours) for 3- to 4-year-olds will be expanded and extended to children from 9 months to 4 years old (where parents work at least 16 hours a week). This is being done in stages from April 2024 to September 2025.
- Parents who claim universal credit will now be paid this up front to cover childcare costs and the per child monthly cap will increase from £646 to £951 per child.
- Incentive payments of £600 to be paid to those becoming childminders and the rules regarding how many children a childminder can look after are to be relaxed.
- New testing regime for “fitness to work” to be brought in for those looking to qualify for health- related benefits.
- Funding for new voluntary employment scheme called “Universal Support” for the disabled to be made (50,000 places).
- The over 50’s to be encouraged back to the workplace, not just through the pension changes highlighted above, but through places on skilled “boot camps”.
- Immigration rules to be relaxed for certain jobs within the construction industry.
- Energy Price Guarantee to remain at £2,500 for April, May, and June 2023 instead of being increased to £3,000 from 1 April 2023.
- Energy charges for prepayment meters are to be brought into line with prices customers are paying via DD.
- Investment of £63m will be made to leisure centres to help support them with the rising cost of heating swimming pools and to help them improve energy efficiency.
- £20bn to be invested in low-carbon energy projects over the next 20 years.
- Nuclear energy to be classed as environmentally sustainable to drive investment.
- A new body called “Great British Nuclear” will be launched to help energy companies locate sites for nuclear power plants and develop supply chains.
Business and taxation
- The Corporation tax rise will still happen as planned from 1 April 2024 – businesses with profits of more than £250k will pay corporation tax at 25% increased from 19%.
- Businesses with profits between £50k and £250k will pay tax between 19% and 25% (marginal relief).
- Businesses with profits of less than £50k will see no change from the 19% Corporation Tax currently paid.
- “Full expensing” to replace the super deduction for new plant and machinery purchased from 1 April 2023 to 31 March 2026. This is an allowance of 100% of the cost of the assets (a reduction from the 130% super deduction).
- International traders to benefit from streamlined rules for customs forms and reduced paperwork.
- £900m to be provided towards developing a “super computer” for the UK to help the UK’s Artificial Intelligence industry.
- There is to be a new annual prize of £1m which will be awarded every year for 10 years to Artificial Intelligence researchers for the best innovations. It is to be named the “Manchester Prize” in recognition of The University of Manchester’s invention of the first stored-program computer in 1948.
- There will be 12 new “investment zones” across the UK which will be led by partnerships with local authorities, universities and businesses to encourage innovation.
- The 5p cut to fuel duty on petrol and diesel that was due to end in April will be kept for another year and there will be no inflationary rise.
- Alcohol duty to rise in line with inflation from August (10.1%), but the duty on average strength draught beer sold in UK pubs will be frozen.
- Spending on defence to increase by £11bn over the next 5 years.
- Those convicted of marketing tax avoidance schemes will receive prison sentences.
- Charities in England helping to prevent suicide will be given an additional £10m of funding.
- Funding of £200m will be designated to help local councils in England repair potholes.
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