Spring Budget 2023: Key Takeaways for Businesses
Chancellor Jeremy Hunt announced several measures to support businesses and households in the Spring Budget. This post summarises the main points and their implications for business owners.
The Office for Budget Responsibility (OBR) predicts the UK will avoid a technical recession, with GDP expected to contract by 0.2% in 2023. Growth is projected for 2024 to 2027, and inflation is forecasted to fall from 10.7% to 2.9% by the end of 2023.
The UK Economy
The Energy Price Guarantee will continue at its current level, saving an average family £160 on their energy bills. The "prepayment premium" will be scrapped in July, benefitting around four million households.
Energy Bills Support
The pension lifetime allowance, currently just over £1m, will be abolished, encouraging over-50s who took early retirement to return to work. This change will eliminate taxes on pensions for 80% of NHS doctors.
Pension Lifetime Allowance Abolished
Free childcare provision will be expanded and extended to children aged nine months to four years, with phased implementation starting in April 2024. This policy will be worth £6.5bn overall and help parents who work at least 16 hours per week.
The corporation tax rate will rise from 19% to 25%, with the full increase affecting businesses with profits over £250,000. Smaller companies will continue to pay at the 19% rate.
Corporation Tax Rise
The planned fuel duty rise has been delayed, and the temporary 5p fuel duty cut will be extended by 12 months, avoiding a potential 23% increase in fuel costs.
Fuel Duty Delay and Extension
Twelve new investment zones will be created across the UK, fostering innovation and development through partnerships between local authorities, universities, and businesses.
The UK's defence budget will rise by £11bn over the next five years to increase defence spending to 2.5% of GDP when circumstances permit.
Defence Budget Increase
New Nuclear Power Body Great British Nuclear (GBN) will be launched to help energy companies find suitable sites for nuclear power plants and develop supply chains, to generate 25% of the UK's electricity from nuclear by 2050.
The government will invest £900m in a new supercomputer, launch an AI sandbox, and create a £1m annual prize for AI researchers to boost the UK's AI industry.
AI Research Funding and Prizes
Duty on draught pints will be frozen, benefiting the pub industry. However, the tax on other alcoholic drinks will increase by 10.1% in August.
Brexit Beer Boost
The Chancellor's Spring Budget includes several measures to support businesses and households in the UK. Business owners should be aware of these changes and their potential impact on operations, growth, and profitability.