The overriding message from Spring Budget 2023 is one of building growth in the economy and to get more people working.
The pension lifetime allowance is being abolished to try and incentivise those thinking of retiring early to continue and save more by way of pensions. At the opposite end – childcare costs have been reduced for parents of 1 and 2 year olds which will now qualify for 30 hours free childcare, allowing more parents to go to work. Whilst these measures will promote those effected to continue or enter the workforce – it cannot be seen as a measure that impacts the majority of the population.
Businesses have been left out of the support with energy payments that households will continue to benefit from. If the economy is to grow, businesses need supporting to allow for the jobs to be available for individuals to go to work. If energy prices do not fall as predicted later this year, then I am nervous on what impact this will have to the economy.
Companies have been dealt a potential tax saving with the introduction of full expensing. From 1 April 2023, full expensing replaces the super deduction and will last until 31 March 2026. This will allow corporate entities to gain tax relief on the full amount of qualifying asset purchases. Corporation tax rates increase to 25% from 1 April 2023 which can be mitigated by taking advantage of the relief that full expensing will provide. In addition to this the annual investment allowance is to remain at £1m which more businesses will be able to access with sole trades and partnerships qualifying.
Posted by Craig Weavers
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The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.