Spring Statement
Chancellor of the Exchequer, Jeremy Hunt, has unveiled his spring statement against a backdrop of rising fuel, energy and food costs. We wanted to provide you with a summary of the most notable points that were made in the speech.
‘UK won’t go into recession this year’
The chancellor’s overall aim with the Spring Budget is to avoid the UK entering recession during 2023. He states that the economy is ‘on the right track’ and inflation is predicted to fall to 2.9% by the end of the year1, which will hopefully mean that the rapidly rising prices witnessed in recent times will start to stabilise.
Limits scrapped on tax-free pension savings
The lifetime allowance on tax-free pension contributions was scrapped, having formerly stood at £1.07m. Alongside this, the tax-free yearly allowance for pension pots is to rise from £40,000 to £60,000, having been frozen for the past 9 years1.
Free childcare expanded for working parents by 2025
The Spring Budget announcement saw that free childcare of 30 hours a week for working parents is being expanded to cover children from the age of 9 months to 2 years old, but will only be implemented fully by 2025.1
Fuel duty to be frozen for further year
Jeremy Hunt also announced that fuel duty will be frozen for a further year, this is the 5p discount that was first applied in March 2022, and will now continue until March 2024.1
Government extend Energy Price Guarantee for 3 months to June 2023
The Government’s Energy Price Guarantee will be kept at £2,500 for an additional three months from April to June 2023. Energy prices are generally lower than expected, but remain high, with this support aiming to help bridge the gap to the lower prices forecast by the Government from the end of June. There will also be adjustments to align energy bills for those with prepayment meters to those paying via direct debit.1
Taxation changes announced for products, business & industry
A variety of taxation changes were also announced in today’s Spring Budget;
- Alcohol taxes to rise in line with inflation from August, with new reliefs for beer, cider and wine sold in pubs.
- Tax on tobacco to increase by 2% above inflation, and 6% above inflation for hand-rolling tobacco.
- Corporation Tax, payable by businesses with profits over £250k, will rise from 19% to 25%.
- Tax breaks and other benefits were announced for 12 new ‘Investment Zones’ over the next 5 years across the UK.
Other announcements in the Spring Budget
- Commitment to raise defence spending by £11bn over the next five years
- Prison sentences for those convicted of marketing tax avoidance schemes
- An extra £10m over next two years for charities helping to prevent suicide
- Streamlined approvals process promised for new medical products
- £900m for new super computer facility, to help UK's AI industry
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Source
BBC News – Budget 2023 Key Points At a Glance - https://www.bbc.co.uk/news/business-64789405
All the information in this article is correct as of the publish date 15th March 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.
Published: 16 March 2023
