Spring Budget 2023

Enterprise, Education, Employment, Everywhere… All at once!

The Chancellor of the Exchequer, Jeremy Hunt, presented the Spring Budget to Parliament yesterday. This Spring Budget is the first full Budget since October 2021. Since then, the UK has had three Prime Ministers and four Chancellors without a General Election or change in the party of government.

The Chancellor says this is a ‘Budget for growth’ based on the pillars of ‘enterprise, education, employment and everywhere’.

This snapshot is intended to give you high level bullet points of the key points announced by the Chancellor from the dispatch box.

More, in-depth details are available from GOV.UK.

OBR economic forecasts
The OBR expects that the economy will fall into recession and living standards will fall 7% over the next two years.

Growth

• 2022: 4.0%
• 2023: -0.2%
• 2024: 1.8%
• 2025: 2.5%
• 2026: 2.1%
• 2027: 1.9%

A ‘technical recession’ occurs if the economy shrinks for two quarters in a row.

CPI Inflation

• 2022: 9.1%
• 2023: 7.4%
• 2024: 0.6%
• 2025: -0.8%
• 2026: 0.2%
• 2027: 1.7%

Public sector net borrowing

• 2022/2023: 6.1%
• 2023/2024: 5.1%
• 2024/2025: 3.2%
• 2025/2026: 2.8%
• 2026/2027: 2.2%
• 2027/2028: 1.7%

Unemployment

• 2022: 3.7%
• 2023: 4.1%
• 2024: 4.4%
• 2025: 4.3%
• 2026: 4.2%
• 2027: 4.1%

Tax

• Income tax and National Insurance rates and thresholds remain unchanged.
• ISA subscription limits remain unchanged at £20,000.
• Corporation tax increase from 19% to 25% will go ahead from April 2023 for firms which make a profit of more than £250,000.
• From 1 April 2023 until 31 March 2026 investments made by companies in qualifying plant and machinery will qualify for a 100% first-year allowance against corporation tax. The intention is to make this permanent.

Pensions

• The lifetime allowance charge will be abolished from 6 April 2023 with the lifetime allowance to be abolished in full in a future Finance Bill.
• The maximum tax free cash payable for individuals without protection will remain £268,275 and not increase in future.
• The pensions annual allowance will increase from £40,000 to £60,000 from 6 April 2023. Carry forward of unused annual allowances from the 3 previous tax years will remain available.
• The money purchase annual allowance will increase from £4000 to £10,000 and the minimum tapered annual allowance from £4000 to £10,000 from 6 April 2023.
• The adjusted income threshold for the tapered annual allowance will increase from £240,000 to £260,000 from 6 April 2023.

Energy costs and duties 

• The Energy Price Guarantee across the UK will remain at £2500 a year for the typical household for an additional three months until June 2023. The planned increase to £3000 a year will now be implemented on 1 July 2023.
• Alcohol duty rates are frozen until August 2023 and will then increase by RPI.
• The 5p fuel duty cut is extended for 12 months and there will be no RPI increase in 2023/2024.

Welfare and work

• 30 free hours per week will be available for working parents with children aged 9 months up to 3 years in England, where eligibility will match the existing 3 to 4 year-old 30 hours offer.
• There will be an expansion of the midlife MOT Jobcentre Plus offer to reach more claimants aged over 50 through support sessions, improving the digital midlife MOT tool, and working with employers and pension providers to encourage signposting to the midlife MOT and related support.
• Disability benefits reforms including plans to abolish the work capability assessment and to separate benefits entitlement from an individual’s ability to work.

Local government and investment zones

• New devolution deals for Greater Manchester and the West Midlands giving local leaders greater control over local transport, employment, housing, innovation and net zero priorities.
• 12 new investment zones to be launched in the West Midlands, Greater Manchester, the north-east, South Yorkshire, West Yorkshire, East Midlands, Teesside and Liverpool with at least one in Scotland, Wales and Northern Ireland. These will be knowledge-intensive growth clusters intended to drive the growth of at least one of our key future sectors – green industries, digital technologies, life sciences, creative industries and advanced manufacturing.

If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected by the 2023 Spring Budget, please get in touch with us today, and one of our experienced financial advisors can  discuss this with you.

Whether you are needing help with with buying a property, saving regularly from your income to make provision for retirement, building up an emergency fund or making provision for your family and children, the financial advisors in our offices can provide expert advice across a wide range of personal financial planning services. Our offices also provide financial advice to businesses, with our business financial planning services including protecting your business, enhancing recruitment and retention through attractive employee benefits and managing workplace pensions efficiently.