Spring Budget 2023: For Businesses

In Jeremy Hunt’s first budget speech he provided a great deal of headline support to UK businesses and concentrated on the letter E with Enterprise, Everywhere, Employment and Education.

It was confirmed that the Corporation Tax rate will rise as previously announced to increase from 1 April 2023 from a rate of 19% to a rate of 25%.

At the same time of this increase, the capital allowance super deduction of 130% is to cease, however for smaller businesses the Annual Investment Allowance will be £1m, meaning that 99% of all businesses can deduct the full value of all their investment from that year’s taxable profits, Hunt says.

The super deduction only related to Companies, so to assist businesses there will be an introduction of “full expensing”, which for the next three years, with an intention to make it permanent as soon as we can responsibly do so.

The relevant expenditure will result in every single pound a company invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profits.

Remuneration and retirement planning has also been a recent focus from several Chancellors, and with the announcement that the pension lifetime limit is to be abolished, together with annual limits contributions being increased from £40,000 to £60,000, such changes can be beneficial for businesses not only in the lifetime of the business, but also with the retirement of those individuals.

For the owner managed business matters are to become much more complex, however with the right advice at the appropriate moment the complexities can be manoeuvred.

Please take the time to read our summary of the changes announced and their impact via the link below:

Spring Budget Summary: 2023

For advice and guidance contact your local Whitings Office.

Disclaimer - All information in this post was correct at time of writing.