{"id":12895,"date":"2023-03-15T22:09:39","date_gmt":"2023-03-15T22:09:39","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/?p=12895"},"modified":"2023-03-16T12:52:52","modified_gmt":"2023-03-16T12:52:52","slug":"spring-budget","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2023\/03\/15\/spring-budget\/","title":{"rendered":"Spring Budget 2023"},"content":{"rendered":"
\n

\u201cA Budget for Growth\u201d<\/em><\/strong><\/em><\/strong><\/p>\n<\/div>\n\n

\n

Chancellor of the Exchequer, Jeremy Hunt, delivered his first <\/strong>Spring Budget <\/strong>on <\/strong>15<\/strong> March declaring it w<\/strong>as <\/strong>“A Budget for Growth.\u201d<\/em><\/strong> The fiscal <\/strong>update<\/strong> <\/strong>included a range of new measures, some of which had been widely trailed prior to Budget day, in order to achieve growth <\/strong>“by removing obstacles that stop businesses investing; by tackling labour shortages that stop them recruiting; by breaking down barriers that stop people working; and by harnessing British ingenuity to make us a science and technology superpower.”<\/em><\/strong><\/p>\n<\/div>\n\n

\n

OBR<\/strong> forecasts<\/strong><\/p>\n<\/div>\n\n

\n

The Chancellor began his statement by unveiling the latest economic projections produced by the Office for Budget Responsibility (OBR) which he said showed the UK would meet the Prime Minister\u2019s priorities to \u201chalve inflation, reduce debt and get the economy growing.\u201d<\/em> In relation to the first priority, Mr Hunt said the latest OBR figures suggest inflation will fall from an average rate of 10.7% in the final quarter of last year to 2.9% by the end of 2023. This sharp decline is partly due to some of the Chancellor\u2019s Budget measures, including the three-month extension to the household Energy Price Guarantee (EPG), which the government had confirmed earlier in the day.<\/p>\n<\/div>\n\n

\n

Mr Hunt also said the OBR forecast suggests the UK economy will now avoid a technical recession this year (defined as two consecutive quarters of economic decline) and then expand in each of the remaining years of the five-year forecast period. According to the updated figures, the economy is expected to shrink by 0.2% this year, a significant upgrade from last autumn\u2019s forecast of a 1.4% contraction, with growth then predicted to hit 1.8% in 2024 and 2.5% in 2025, before easing back towards its medium-term potential growth rate of 1.75% by 2028.<\/p>\n<\/div>\n\n

\n

The Chancellor\u2019s growth strategy focuses on the four pillars \u2018Everywhere, Enterprise, Employment and Education,\u2019 as previously outlined in his Bloomberg speech in January.<\/p>\n<\/div>\n\n

\n

Everywhere<\/strong><\/p>\n<\/div>\n\n

\n

Mr Hunt spoke about the government\u2019s plans for \u2018Levelling Up,\u2019 including the launch of 12 new Investment Zones. Across these \u201c12 potential Canary Wharfs,\u201d<\/em> \u00a380m of support per zone will be available for skills, infrastructure and tax reliefs.Mr Hunt also mentioned specific projects selected for local investment, including:<\/p>\n<\/div>\n\n

\n
    \n
  • \u00a3200m for local regeneration projects and \u00a3400m for new Levelling Up Partnerships across England<\/li>\n<\/div>\n\n
    \n
  • \u00a38.8bn over the next five-year funding period for the City Region Sustainable Transport Settlements<\/li>\n<\/div>\n\n
    \n
  • Up to \u00a38.6m for the Edinburgh Festivals, as well as \u00a31.5m for the repair of Cloddach Bridge, near Elgin, and \u00a320m for the restoration of the Holyhead Breakwater in Anglesey<\/li>\n<\/div>\n\n
    \n
  • Up to \u00a33m to extend the Tackling Paramilitarism Programme in Northern Ireland.<\/li>\n<\/div><\/ul>\n<\/div>\n\n
    \n

    Enterprise<\/strong><\/p>\n<\/div>\n\n

    \n

    To provide the right conditions for businesses to succeed:<\/p>\n<\/div>\n\n

    \n
      \n
    • A \u2018full expensing\u2019 policy will apply from 1 April 2023 until 31 March 2026 to allow investment in IT, plant or machinery to be deducted in full and immediately from taxable profits<\/li>\n<\/div>\n\n
      \n
    • An increased rate of relief for loss-making Research and Development (R&D)-intensive small and medium size enterprises (SMEs) \u2013 eligible companies will receive a \u00a327 credit from HMRC for every \u00a3100 of R&D investment<\/li>\n<\/div>\n\n
      \n
    • An extension of higher reliefs for theatres, orchestras, museums and galleries for two further years<\/li>\n<\/div><\/ul>\n<\/div>\n\n
      \n
        \n
      • The Medicines and Healthcare products Regulatory Agency (MHRA) will receive \u00a310m extra funding over two years<\/li>\n<\/div>\n\n
        \n
      • All of the recommendations from Sir Patrick Vallance\u2019s review of pro-innovation regulation of digital technologies are accepted<\/li>\n<\/div>\n\n
        \n
      • \u00a3900m of funding for AI Research Resource and an exascale computer as well as a commitment to \u00a32.5bn ten-year quantum research and innovation programme through the government\u2019s new Quantum Strategy<\/li>\n<\/div>\n\n
        \n
      • Innovation Accelerators programme \u2013 \u00a3100m funding for 26 transformative R&D projects<\/li>\n<\/div>\n\n
        \n
      • AI Challenge Prize \u2013 \u00a31 million prize every year for the next ten years to researchers that drive progress in critical areas of AI.<\/li>\n<\/div><\/ul>\n<\/div>\n\n
        \n

        Employment<\/strong><\/p>\n<\/div>\n\n

        \n

        The Chancellor turned next to Employment, with a suite of new measures to \u201cremove the barriers that stop people who want to from working.\u201d<\/em> To achieve this, he announced:<\/p>\n<\/div>\n\n

        \n

        Mature workers<\/strong><\/p>\n<\/div>\n\n

        \n
          \n
        • The expansion of the DWP\u2019s \u2018midlife\u2019 MOT scheme, aiming to reach up to 40,000 individuals per year (up from the current 8,000)<\/li>\n<\/div>\n\n
          \n
        • New \u2018Returnerships\u2019 scheme to make existing skills programmes more accessible to older workers and help them upskill and retrain<\/li>\n<\/div>\n\n
          \n
        • A pension tax relief overhaul; see details in Personal Taxation and Pensions section.<\/li>\n<\/div><\/ul>\n<\/div>\n\n
          \n

          People with long-term illnesses and disabilities<\/strong><\/p>\n<\/div>\n\n

          \n
            \n
          • A white paper on disability benefits reform<\/li>\n<\/div>\n\n
            \n
          • The abolition of the Work Capability Assessment for disability benefits claimants<\/li>\n<\/div>\n\n
            \n
          • A new voluntary employment scheme for people with disabilities<\/li>\n<\/div>\n\n
            \n
          • \u00a3406m to increase support for working adults with mental health, musculoskeletal and cardiovascular problems.<\/li>\n<\/div><\/ul>\n<\/div>\n\n
            \n

            Welfare recipients<\/strong><\/p>\n<\/div>\n\n

            \n
              \n
            • An increase to the Administrative Earnings Threshold<\/li>\n<\/div>\n\n
              \n
            • A stronger sanctions regime for Universal Credit claimants.<\/li>\n<\/div><\/ul>\n<\/div>\n\n
              \n

              Care leavers<\/strong><\/p>\n<\/div>\n\n

              \n
                \n
              • A 50% increase in funding for the Staying Close programme<\/li>\n<\/div>\n\n
                \n
              • An increase in the Qualifying Care Relief threshold to \u00a318,140 per year plus \u00a3375 to \u00a3450 per person cared for per week for 2023\/24 and these thresholds will then be index-linked, representing a tax cut worth approximately \u00a3450 per year on average.<\/li>\n<\/div><\/ul>\n<\/div>\n\n
                \n

                Education<\/strong><\/p>\n<\/div>\n\n

                \n

                Mr Hunt then turned to Education, stating that he wants to reform the childcare system, currently \u201cone of the most expensive systems in the world.\u201d<\/em><\/p>\n<\/div>\n\n

                \n

                His new proposal will offer 30 free hours of childcare each week to pre-school-age children aged nine months or above in English households where both parents work. It will be phased in on the following timeline:<\/p>\n<\/div>\n\n

                \n
                  \n
                • April 2024 \u2013 eligible two-year-olds will receive 15 hours of free childcare per week<\/li>\n<\/div>\n\n
                  \n
                • September 2024 – qualifying children aged nine months to two years will receive 15 hours<\/li>\n<\/div>\n\n
                  \n
                • September 2025 – eligible children aged nine months to three years will receive 30 hours.<\/li>\n<\/div><\/ul>\n<\/div>\n\n
                  \n

                  Also, schools and local authorities will be funded to increase availability of wraparound care, to enable parents of school-age children to drop them off between 8am and 6pm. <\/p>\n<\/div>\n\n

                  \n

                  To tackle the problem of unaffordable upfront costs, Mr Hunt also announced support for the 700,000 families on Universal Credit. Another major change involves each staff member in England being able to look after five two-year-olds instead of four, as is already the case in Scotland.<\/p>\n<\/div>\n\n

                  \n

                  Personal Taxation and Pensions<\/strong><\/p>\n<\/div>\n\n

                  \n

                  To encourage over-50s to extend their working lives, the government is increasing tax relief limits on pension contributions and pots \u2013 the Annual Allowance will be raised from \u00a340,000 to \u00a360,000 from April 2023; the Lifetime Allowance (LTA) charge will be removed from April 2023, and the LTA will be abolished from April 2024. The maximum amount that can be accessed tax free (Pension Commencement Lump Sum) will be frozen at its current level of \u00a3268,275 (25% of current LTA). From April, the minimum Tapered Annual Allowance (TAA) and the Money Purchase Annual Allowance (MPAA) will increase from \u00a34,000 to \u00a310,000 and the adjusted income threshold for the TAA will also rise, from \u00a3240,000 to \u00a3260,000.<\/p>\n<\/div>\n\n

                  \n

                  As a reminder, the following changes were previously announced in the Autumn Statement 2022:<\/p>\n<\/div>\n\n

                  \n
                    \n
                  • The Income Tax additional rate threshold (ART) at which 45p becomes payable is lowered from \u00a3150,000 to \u00a3125,140 from April 2023. The ART for non-savings and non-dividend income will apply to taxpayers in England, Wales and Northern Ireland<\/li>\n<\/div>\n\n
                    \n
                  • The Dividend Allowance reduces from \u00a32,000 to \u00a31,000 from April 2023 and to \u00a3500 from April 2024<\/li>\n<\/div>\n\n
                    \n
                  • The annual Capital Gains Tax exemption reduces from \u00a312,300 to \u00a36,000 from April 2023 and to \u00a33,000 from April 2024<\/li>\n<\/div>\n\n
                    \n
                  • The Stamp Duty Land Tax nil-rate threshold for England and Northern Ireland is \u00a3250,000 for all purchasers and \u00a3425,000 for first-time buyers, remaining in place until 31 March 2025.<\/li>\n<\/div><\/ul>\n<\/div>\n\n
                    \n

                    In addition:<\/p>\n<\/div>\n\n

                    \n
                      \n
                    • The Income Tax Personal Allowance and higher rate threshold remain at \u00a312,570 and \u00a350,270 respectively until April 2028 (rates and thresholds may differ for taxpayers in parts of the UK where Income Tax is devolved)<\/li>\n<\/div>\n\n
                      \n
                    • The basic State Pension will increase in April 2023 from \u00a3141.85 per week to \u00a3156.20 per week, while the full new State Pension will rise from \u00a3185.15 to \u00a3203.85 per week. The standard minimum income guarantee in Pension Credit will also increase in line with inflation from April 2023 (rather than in line with average earnings growth)<\/li>\n<\/div>\n\n
                      \n
                    • Inheritance Tax (IHT) nil-rate bands remain at \u00a3325,000 nil-rate band, \u00a3175,000 residence nil-rate band, with taper starting at \u00a32m \u2013 fixed at these levels until April 2028<\/li>\n<\/div>\n\n
                      \n
                    • National Insurance contributions (NICs) Upper Earnings Limit (UEL) and Upper Profits Limit (UPL) are frozen until April 2028<\/li>\n<\/div>\n\n
                      \n
                    • The ISA (Individual Savings Account) allowance remains at \u00a320,000 and the JISA (Junior Individual Savings Account) allowance and Child Trust Fund annual subscription limits remain at \u00a39,000.<\/li>\n<\/div><\/ul>\n<\/div>\n\n
                      \n

                      Other key points<\/strong><\/p>\n<\/div>\n\n

                      \n
                        \n
                      • Potholes Fund \u2013 an extra \u00a3200m for local road maintenance in England in 2023\/24<\/li>\n<\/div>\n\n
                        \n
                      • Alcohol Duty \u2013 rates frozen until August 2023 then uprated by RPI, Draught Relief increased to 9.2% for beer and cider and 23% for wine from 1 August 2023<\/li>\n<\/div>\n\n
                        \n
                      • Fuel duty rates \u2013 maintaining the rates of fuel duty at the current levels for an additional 12 months<\/li>\n<\/div>\n\n
                        \n
                      • Defence spending \u2013 an extra \u00a34.95bn for defence over 2023\/24 and 2024\/25<\/li>\n<\/div>\n\n
                        \n
                      • Support for veterans \u2013 an additional \u00a333m over the next three years<\/li>\n<\/div>\n\n
                        \n
                      • Swimming Pool Support Fund \u2013 over \u00a360m for public swimming pools across England<\/li>\n<\/div>\n\n
                        \n
                      • Support for charities and community organisations \u2013 \u00a3100m (England)<\/li>\n<\/div>\n\n
                        \n
                      • Plastic Packaging Tax rate \u2013 uprated in line with CPI from 1 April 2023<\/li>\n<\/div>\n\n
                        \n
                      • Launching \u2018Great British Nuclear\u2019 \u2013 supporting new nuclear builds, \u00a320bn available for Carbon Capture, Utilisation and Storage (CCUS), and extending the Climate Change Agreement scheme for a further two years<\/li>\n<\/div>\n\n
                        \n
                      • Devolved administrations \u2013 receiving an additional \u00a3630m through the Barnett formula over 2023\/24 and 2024\/25 (Scottish Government \u00a3320m, Welsh Government \u00a3180m and Northern Ireland Executive \u00a3130m).<\/li>\n<\/div><\/ul>\n<\/div>\n\n
                        \n

                        Closing comments<\/strong><\/p>\n<\/div>\n\n

                        \n

                        Jeremy Hunt signed off his announcement saying, \u201cToday we build for the future with inflation down, debt falling and growth up. The declinists are wrong and the optimists are right. We stick to the plan because the plan is working.\u201d<\/em><\/p>\n<\/div>\n\n

                        \n

                        It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding of taxation and can be subject to change in future. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on individual circumstances.<\/strong><\/p>\n<\/div>\n\n

                        \n

                        All details are believed to be correct at the time of writing (15 March 2023)<\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

                        \u201cA Budget for Growth\u201d Chancellor of the Exchequer, Jeremy Hunt, delivered his first Spring Budget on 15 March declaring it was “A Budget for Growth.\u201d The fiscal update included a range of new measures, some of which had been widely trailed prior to Budget day, in order to achieve growth “by removing obstacles that stop […]<\/p>\n","protected":false},"author":3,"featured_media":12905,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,39],"tags":[],"hd_content_source":[],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/12895"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/comments?post=12895"}],"version-history":[{"count":6,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/12895\/revisions"}],"predecessor-version":[{"id":12914,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/12895\/revisions\/12914"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/12905"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=12895"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=12895"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=12895"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=12895"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}