Summary of the Spring Budget 2023
Jeremy Hunt has just announced his budget for growth. Whilst these announcements do not directly impact the Self Employed too much. Please see a summary and the key considerations below.
Childcare
Parents working at least 16 hours a week each will be able to access up to 30 hours tax free childcare. This will allow caregivers earlier access to get back to work if they wish.
This will be staggered from April 2024 to ensure there are enough places. Children up to two years old will get 15 hours free from April 2024. Children from 9 months up, from September 2024. From September 2025, every working parent with a child under 5 will access 30 hours free childcare a week.
Pension
There have been a few changes around pensions and what can be contributed to your pension pot.
Previously in the UK everyone will have a lifetime allowance that you can accumulate in your pension savings pot before you pay extra tax. This previously sat at £1,073,100. However this has now been scrapped, there is no more pension lifetime allowance.
In addition to this there is a maximum contribution each tax year that you can contribute towards your pensions, whether it is from your employment or personally made contributions. This was previously £40,000 but has now been increased to £60,000.
Business Support
Corporation tax on profits over £250,000 will increase to 25% from April 2023. This is a big change to the Corporation Tax system. For those earning below £50,000 in profits the rate will remain 19%.
For those that make profits of between £50,000 and £250,000 a marginal relief will apply. Marginal Relief provides a gradual increase in the Corporation Tax rate between the small profits rate and the main rate.
Also mentioned was a full capital expensing on IT equipment and plant and machinery. This allows you to deduct the full cost of these items against taxable profits.
Further R&D relief for small to medium sized businesses has been introduced. If a business spends 40% or more of their expenditure they will be able to claim a credit worth £27.00 for every £100.00 spent.
Energy Bills
The Government will continue and extend the energy price guarantee which keeps the average household bill at £2,500 until the end of June. This was due to end and rise to £3000 from the 1st April.
One important consideration is the energy rebate scheme, in which most energy customers have had six installments of £66/ £67 credit on their energy bills, this has not been extended and this will end this month.
Other
Fuel Duty will continue to be frozen for the next 12 months, an extension of the 5p cut in fuel duty. This effectively saves you £100 for the year, £200 since the cut was introduced.
Tax relief of 11p has been announced on draft drinks served in pubs so effectively from the 1st August a pint will be cheaper!
As you can see a few changes but little on self employment, this budget seemed more about the economy as a whole.
Any questions please do reach out at jamie@tax-ninja.co.uk or 01869323887.
