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Budget 2023: Summary of key points

Jeremy Hunt unveiled his 'Back to Work' March Budget. Below we summarise some of the key points.

The OBR has said that the UK will not enter recession this year. Inflation is set to fall to 2.9% by the end of the year. The full summary from HMT can be found here. Corporation Tax Increases to Corporation Tax to go ahead as planned from April. The headline rate will increase to 25% on profits of more than £250,000.

Small Business Investment Allowance The Annual Investment Allowance to be increased to £1m.

A new policy on capital expensing to be introduced, to enable 'full expensing'. The Chancellor stated that this will mean that every pound a business invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profits.

Research and Development Small and medium-sized businesses will be able to claim a credit of £27 for every £100 spent, if they spend 40% or more of their total expenditure on Research and Development.

Energy Support Prepayment metres charges to be brought in line with comparable direct debit charges. The Energy Price Guarantee (EPG) to be maintained at £2,500 for another three months. It had been due to increase to £3,000 and affects domestic properties only.

Annual Pension Allowance and Life Time Allowance The Lifetime Allowance to be abolished. The annual tax-free allowance is to be increased from £40,000 to £60,000.

Nursery Fees and Childminders Incentive payments of £600 to be piloted for childminders. Funding increased for nurseries offering free childcare hours. Minimum staff to child ratios to be reduced to match those in Scotland. The thirty hours of free childcare will be extended to children between nine months and three years (three year olds are already entitled to thirty hours of childcare). To qualify all adults in the household must work for sixteen hours or more a week and no one parent can earn over £100,000 a year under the current scheme. This will be phased in, with fifteen hours of free childcare provided to two-year-olds from April 2024.

Investment Zones Twelve new investment zones will be created. These new innovation clusters will be formed by local governments in partnership with a local university and will receive funding from central government.

Fuel Duty Fuel duty will be frozen with the 5p reduction maintained for a further year.

Source: CPAA

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