The March Budget 2023 at a glance

The March Budget 2023 at a glance

As Jeremy Hunt wraps up his speech for the March Budget 2023, we distil the main changes and updates so you can see what’s likely to impact you over the coming months. 

Cost of Living measures

• The Office of Budget Responsibility’s forecast for inflation is now a reduction from the current level of 10.1% to 2.9% by the end of 2023.
• The Energy Price Guarantee will remain in place for the next 3 months to 30 June 2023 meaning the average household will not pay more than £2,500, saving around £160 for each family.
• 4 million households who are currently on pre-payment meters will no longer pay a premium for their energy bringing the rates in line with direct debit customers.
• Additional funding includes £63m to keep leisure centres and swimming pools, £100m for charities, an additional £10 specifically for mental health charities.
• Fuel duty will be frozen and the 5p cut is maintained for an additional 12 months, saving the average driver around £100 next year.
• Alcohol duty on draft beer in pubs will be up to 11p lower than in supermarkets.

Enterprise and investment measures

• The planned corporation tax increase to 25% from April 2023 remains intact.
• 12 new investment zones which will attract funding of up to £80m will be created across the UK, including one in each of Scotland, Wales and Northern Ireland.
• The small business investment allowance is increased to £1m, meaning that 99% of all small businesses can deduct the full value of their investment from that year’s taxable profits.
• New policy of full capital expensing for the next 3 years, with an ambition to make it permanent meaning that all costs of IT equipment, plant & machinery are fully deductible. 
• Additional R&D tax credit of 27% for SMEs spending more than 40% of their expenditure on R&D.
• CCUS – £20bn support for carbon capture usage and storage (CCUS) projects to help meet net zero commitments.
• The Climate Change Agreement scheme is extended for two years to allow eligible businesses £60m of tax relief on energy efficiency measures.
• Nuclear energy vital to meet net zero commitments. Reclassified as environmentally sustainable which gives access to same reliefs as sustainable energy. GB Nuclear – bring down costs & supply 25% of energy by 2050. First competition for small modular reactors – co-fund the technology.
• Reform regulations around medicines and medical technology – from 2024 the UK will move to different model to allow quick UK approval of medicines already approved by other global regulatory bodies. 
• Manchester Prize of £1m every year to person or team that does the most ground-breaking artificial intelligence research.

Growth and employment measures

• The OBR is forecasting that the economy will contract this year by 0.2% but will avoid a technical recession (two consecutive declining quarters)
• The Work capability assessment for disabled people will be abolished enabling disabled benefit claimants to work with fear of losing their benefits.
• There will be an increase the number of 50+ Universal Credit claimants who receive mid-life MOTs from 8,000 to 40,000 a year.
• £400m of support for mental health/musculoskeletal resources for people considering leaving work because of these issues.
• For workers on Universal Credit without disability or sickness, more sanctions will be applied to receive benefits - anyone working less than 18 hours will receive more work coach support to get them back into work/increase their hours.
• A new apprenticeship, known as a ‘returnership’ will be available for workers over 50 to enable them to upskill and retrain.
• Up to 40,000 over 50s on UC will get access to a mid-life MOT to help them prepare for retirement and improve financial resilience.

Education and childcare measures

• A pilot scheme of incentive payments of £600 for childminders joining the professional (£1200 through agencies) 
• Change in minimum staffing ratios of 1:4 to 1:5 for two-year-olds (ratios are not compulsory)
• Upfront payments of £951 for one child and £1630 for two children to access subsidised childcare.
• The Qualifying Care Relief threshold doubles to £18,140 which will mean a tax cut for a qualifying carer averaging £450 a year.
• Children aged 9 months-2 will get 30 free hours (in households where all adults working at least 16 hours). However, this will be implemented in stages – two-year-olds will get 15 hours from April 2024, all children from 9 months will get 15 hours from September 2024. From September 2025, all children will get 30 funded hours a week of term-time care (38 weeks a year)

Personal finances

• There are no additional changes to income tax rate, income tax personal allowance, NI, Capital Gains Tax, Dividend Tax, Stamp Duty, Universal Credit or National Pay rates which will all remain as stated in the Autumn Statement.

Wages from 1 April 2023

• National Living Wage for those aged 23 and over: From £9.50 to £10.42 an hour
• National Minimum Wage for those aged 21-22: From £9.18 to £10.18 per hour
• National Minimum Wage for those aged 18-20: From £6.83 to £7.49
• National Minimum Wage for under 18s and apprentices: From £4.81 to £5.28

For more information on the March Budget 2023, visit the Government website.

Understanding the impact of the latest Budget

To talk about how the March Budget 2023 might affect your business, investments and personal situation, get in touch with David Masih our client relationship partner. David can explore tax mitigation strategies during a no obligation chat today. Call 03330 067 123 or email info@onthegoaccountants.co.uk.

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