Spring Statement 2023 Summary

Yesterday, The Chancellor of the Exchequer, Jeremy Hunt, delivered his Spring Budget to Parliament.

The Spring Budget 2023 aims to halve inflation, reduce debt and grow the economy.

Here is a summary of the key points arising in the Budget Statement:

Personal Tax

• The £1.073m lifetime allowance for pensions contributions is to be abolished; the annual allowance will be raised from its current level of £40,000 to £60,000; and, in a move to encourage the over-50's back to work, the annual limit on contributions after pension drawdown will revert to £10,000;

Childcare

• Significant reforms to childcare are designed to remove barriers to work including 30 hours of free childcare for every child over the age of nine months with working parents by September 2025, where eligibility will match the existing 3-4 year-old 30 hours offer;

• Incentive payments of £600 will be piloted from Autumn of this year for those who sign up to become a childrminder (rising to £1,200 for those who join through an agency) to increase the number available and increase choice and affordability for parents.

• Childcare costs of parents moving into work or increasing their hours on Universal Credit paid upfront rather than in arrears, with maximum claim boosted to £951 for one child and £1,630 for two children – an increase of around 50%.

Capital Allowances

• Companies incurring qualifying expenditure on the provision of new plant and machinery on or after 1 April 2023 but before 1 April 2026 will be able to claim one of two temporary first-year allowances. A 100% first-year allowance for main rate expenditure or a 50% first-year allowance for special rate expenditure;

Research & Development

• Additional R&D tax relief will be available for eligible R&D–intensive SMEs. From 1 April 2023, a new credit rate will be available to loss-making companies whose R&D expenditure constitutes at least 40% of total expenditure;

Investment Zones

• Twelve Investment Zones will be established across the UK, with access to £80 million over five years;

Creative Industries Tax Reliefs

• The Chancellor has provided a boost for the UK film and TV industry by increasing tax breaks and maintaining the qualifying threshold. From January 2024, film and TV expenditure credit will be raised from 25% to as much as 34%;

• The current headline rates of relief for Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums and Galleries Exhibitions Tax Relief (MGETR) are being extended for two years;

Indirect Taxes

• The Government will extend the zero rate of VAT on prescriptions for medicines supplied through Patient Group Directions;

• Fuel Duty will cuts will be extended for a further 12 months; and

Declaring Cryptoassets

• The Government is introducing changes to the Self Assessment tax return forms SA108 (Capital gains summary page) and SA905 (Trust and estate capital gains page) requiring amounts in respect of cryptoassets to be separately identified.

Other – Tax Fraud

• The maximum sentences for the most egregious forms of tax fraud will be doubled from seven to 14 years;