page 1 BUDGET 15 MARCH 2023 @ Copyright 15 March 2023. All rights reserved. This summary has been prepared very rapidly and is for general information only. The proposals are in any event subject to amendment before the Finance Act. You are recommended to seek competent professional advice before taking any action on the basis of the contents of this publication. Contents Introduction and highlights 1 Personal taxation 2-3 Pensions, savings and investments 4 Welfare and family support 5 Capital taxes 6 Business taxes 7 Value added tax 9 Tax administration 10 National insurance contributions 11 Financial calendar 12 Introduction The first Budget since October 2021 was widely expected to be an uneventful affair. With an election likely in autumn 2024, Mr Hunt’s ‘Budget for growth’ looked set to be a steady-as-you-go fiscal non-event. Yet it turns out that over the next three tax years, Mr Hunt will hand back about £65 billion of the extra tax that he had planned to raise last November, although by 2027/28, he will still be about £40 billion a year to the good. The largest element of his three-year giveaway is the introduction of temporary full expensing for corporate investment in new plant and machinery. This goes some way to counter the impact of the corporation tax rate increase to 25% due in April 2023. The aim behind this relief – stimulating economic growth – drove his extension of free childcare. It also provided justification for the surprise abolition of the pension lifetime allowance (LTA) and increases to the annual allowance. However, the benefits of the pension reforms to high earners have been tempered by a new cap on tax-free cash. Budget highlights l The lifetime allowance (LTA) for pensions has effectively been abolished from 2023/24. l A new monetary limit for the tax-free pension commencement lump sum (PCLS) will be introduced for 2023/24 of £268,275 (equivalent to 25% of the current standard LTA). l The annual allowance for pensions will be increased by 50% to a maximum of £60,000 from 2023/24 and the money purchase annual allowance (MPAA) will rise from £4,000 to £10,000. l Companies investing in new plant and machinery in the three years from 1 April 2023 can claim a first year allowance of up to 100% of expenditure. l SMEs that spend 40% or more of their total expenditure on R&D can claim a tax credit worth £27 for every £100 they spend from April 2023. l The energy price guarantee is maintained at the current £2,500 level until the end of June 2023. l Up to 30 hours of free childcare will be available to working parents of children from the age of nine months by September 2025. Initially, from April 2024, working parents of two-year-olds will be able to access 15 hours of free childcare per week. l The scheduled 11p a litre duty increases in petrol and diesel will not go ahead. l The Office for Budget Responsibility forecasts that the CPI inflation rate will fall from the current 10.1% (January 2023) to just 2.9% by the end of the year.
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