The Spring Budget 2023 revealed a number of significant changes.
Chancellor Jeremy Hunt outlined many measures to help the country’s economic recovery.
From increasing taxes on corporations and raising billions in investment funds to cutting childcare costs and proposing infrastructure spending plans.
The government announced plans to tackle climate change and reduce air pollution by investing in renewable energy sources.
There were also announcements on investment in housing and transport infrastructure and measures to support small businesses.
Let’s get to it!
Reform to Pensions
If you’re planning to retire or already have a pension, good news – the government has recently announced some changes that could benefit you.
From April 2023, the lifetime pension allowance charge will no longer be in place.
This means you won’t be charged any fees on your pension savings up until April 2024, when the allowance is abolished entirely.
And that’s not all – from April 2023, the annual pension allowance will be increased from £40,000 to £60,000.
If you’ve already started drawing a pension, the money purchase annual allowance is also being increased from £4,000 to £10,000.
These changes mean more money in your pocket come retirement, so it’s worth looking into to see if they will apply to you.
Talk to a financial advisor or check with your pension provider today and get the most out of your retirement savings.
The postponement of the Energy Price Guarantee (EPG) is excellent news for households all around the UK.
You can keep saving money on your energy bills over this three-month period since unit prices are lower than Ofgem’s price cap.
However, it’s important to remember that standing charges aren’t affected by this decision and remain under Ofgem’s jurisdiction.
This is a positive move from the government to help people having trouble with their energy bills.
This has been a challenging period for many, so it’s reassuring to know that this decision will help make life a little bit easier.
From 6 April 2023, the additional threshold for income tax will be reduced to £125,140.
This is lower than the current level of £150,000.
However, personal tax thresholds will remain at their current levels – so your allowance and essential and higher-rate points for income tax stay at £12,570 and £50,270 – until April 2028.
This means you won’t have to worry about an increase in your tax bill for the next five years!
National Living Wage
An announcement that many across the country will be interested in hearing is the increase to the National living wage.
From April 1st, the National Living Wage will increase to £10.42 an hour for people aged 23 and over.
For those earning more than £250,000, the corporation tax rate will rise to 25% from April 2023.
For smaller companies with profits up to £50,000, the corporate tax rate will remain 19%.
If your business has profits between these two amounts, you’ll pay a main tax rate with a marginal relief, which means the effective corporation tax rate increases gradually.
*Effective Rate applies to the whole of the profits
Recovery Loan Scheme
Great news for businesses looking for financial support – the Recovery Loan Scheme has been extended to 2024!
This scheme, launched in April 2021 by the British Business Bank, helps companies trying to recover from the pandemic.
You can find more information here.
Stamp Duty and Land Tax
This means anyone in England or Northern Ireland buying residential property will not have to pay any stamp duty on the first £250,000 of their purchase until March 2025. For first-time buyers, this saving increases to £425,000.
This could greatly help many people looking to get onto the property ladder. With these cuts in place, it is enough to make the dream of homeownership a reality.
It’s important to note that these changes only apply to England and Northern Ireland – different rules apply to Scotland and Wales. So if you’re looking to purchase property in either country, check out their stamp duty rules first.
Grants for electric vehicles
If you’re an individual or business owner considering investing in electric vehicle charge points, you can claim 100% of the cost of installing one as a capital allowance with tax relief.
The government has extended the 100% First Year Allowance for electric vehicle charge points up to March 2025 and April 2025, respectively, for corporation tax and income tax purposes.
This could save you a considerable amount of money overall!
So, if you’re considering switching to electric vehicles, take advantage of this great opportunity.
Investing in an EV charger could be more cost-effective than you think.
Parents of children over nine months will now be eligible to receive an additional 15 hours per week of free childcare – a 30-hour total.
This extension will kick off in two steps, with the first step being available for 2-year-olds with working parents from April 2024.
Then come September, those same benefits will apply to 9-month-olds to 3-years old.
This is a great win for parents and childcare providers, as nurseries will also receive increased funding of £288m for next year starting this September.
This extra funding promises to go a long way in providing more quality care for the children in their charge! It’s something that both parents and caregivers alike can be excited about.
The budget promises to create an environment that encourages businesses of all sizes and sectors to thrive.
It will include measures such as investment in infrastructure, tax cuts for small businesses, and support for research and development.
Additionally, the government has promised to invest in skills training to prepare Britain’s workforce for the challenges of a modern economy.
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