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Budget 2023: key points you need to know

UK Chancellor Jeremy Hunt gave his Spring Budget yesterday telling MPs “the OBR is now forecasting that there will be no recession”. Worth noting, no extension was given to the super deduction tax which WILL now end 31 March ’23 and the planned Corporation Tax rate increase IS going ahead from April ’23

Spring Budget update

Corporation tax rate increase confirmed

It was confirmed that the rate of corporation tax for many companies from April 2023 will increase to 25%. This means that, from April 2023, the rates are;

  • 25% for companies with profits over £250,000
  • 19% rate will become a small profits rate payable by companies with profits of £50,000 or less
  • Companies with profits between £50,001 and £250,000 will pay tax at the main rate reduced by a marginal relief, providing a gradual increase in the effective corporation tax rate
  • Bank corporation tax surcharge changes will proceed, meaning that from April 2023 banks will be charged an additional 3% rate on their profits above £100 million.
  • From April 2023 the rate of diverted profits tax will increase from 25% to 31%

More on the Corporation Tax increase and our calculator can be found by clicking here

Capital Allowances

The super-deduction regime will end 31 March 2023, see our blog earlier this week, and will be replaced from 1 April 2023 with ‘full expensing’ – 100% capital allowances for qualifying plant and machinery. The Government indicated that it is their hope to make this permanent, presently available for three years, to 31 March 2026.

Jeremy Hunt will also introduce 50% first year allowances for ‘special rate’ plant and machinery, including long life assets. These rules apply only for corporation tax purposes, and will not be available for businesses which are subject to income tax, unless they are below the Annual Investment Allowance threshold of £1m per annum. 

The Government has also confirmed that the 100% first-year allowance for qualifying expenditure on electric vehicle charge-point equipment will be extended until 31 March 2025 for corporation tax, and 5 April 2025 for income tax.

Jeremy Hunt’s Spring Budget speech also mentioned;

  • Major expansion to childcare support 
  • Pension tax rule reforms
  • Energy price cap extended 
  • Welfare reforms 
  • Fuel duty
  • Cheaper pints at the pub
  • Fixing potholes

HB Accountants Spring Budget Update

Take a look at our full round up of the Chancellor’s Spring Budget 2023 here;

If you would like to talk to us about looking after your personal or business tax, call us on 01992 444466. We’re experts ready to support you and your business, no matter your company size or sector.

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The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above

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