Spring Budget 2023 – Overview and comment

Our take on the Spring Budget 2023

Great news, the UK is going to avoid a recession, because the predicted -1.4% growth has been transformed into a 0.1% or 0.2% increase! Depending on whose figures you believe. And inflation has been touted as returning to under 3%.

However, the rate of corporation tax is going up to 25%. For businesses with profits over £50,000. Those below 50K profit will remain at 19% and those between 50k and 250k will have a gradual increase so that at 250k profit, the whole 25% rate will be in place.

The super deduction tax relief is ending, but the annual investment allowance for qualifying IT or plant and machinery has been increased to 1 million pounds”.

In an attempt to appeal to the anti Brexit campaigners, Chancellor Jeremy Hunt makes an attempt at humour while explaining that avoiding increasing the duty on beer low was possible only because we were no longer in the EU.

“British ale may be warm, but the duty on a (draught) pint is frozen” Which apparently translates as the price of a pint of draught beer will go down and wine spirits and cigarettes will go up, and the duty on fuel remains the same ( but we don’t recommend drinking or smoking that 😉 )

All employers are aware that there’s a skills shortage. So the ‘over 50’s’ are the hot ticket right now.

To make the point, the Chancellor made a joke about being sidelined to the backbenches once he turned 50 and wants to encourage people over 50 to get back into work, find new careers ‘I started a new career in finance’ – which was received which much amusement.

So look out for ‘returnership’ programmes for apprentices over 50 and ‘mid life MOT’s’ to discourage the most skilled to stay in work. And for those in redundancy situations to retrain.

And in addition he wants to discourage retiring high earners, many of who apparently work within the health sector, from retiring early by 1) increasing the pension pot you’re able to access free from tax from the current 40k to 60k and also not raising but ABOLISHING the threshold for ‘lifetime allowance’ on pension pots in the first place. Which was just over 1 million.

So I am sure we’re all going to be dancing in the streets about those changes.

Jobs which are going to be worth investigating:

If you’re a computer programmer working in the development of AI or perhaps thinking of starting a firm using your skill set, looks like you’re in the right business “Because AI needs computing horsepower, I today commit around £900m of funding to implement the recommendations in the independent Future of Compute Review for an Exascale supercomputer. The power that AI’s complex algorithms need can also be provided by quantum computing.

“So today we publish a quantum strategy which will set our vision to be a world leading quantum enabled economy by 2033 with a research and innovation programme totalling £2.5 billion.”

Thinking of becoming a child carer? Apparently there’s been a massive reduction in people offering these services over the last few years so the government are proposing a ‘golden handshake’ for people training to be child carers. Of £600. Not to be sniffed at.

And as part of the plan to augment the workforce  (perhaps replacing Europeans who have had to leave these isles?) and to help address the skills shortage, they have announced  a ‘phased’ programme of child care support – allegedly free for 30 hours a week for children as young as 9 months. But of course, there are hoops to jump through in terms of ceilings on hours adults in the household need to work, and the roll out timescale for that younger group is touted as 2025.

So watch this space.

And if you’ve heard about the “biggest change to our welfare system in a decade”, and this makes you slightly anxious, it’s about reforms aimed at supporting more disabled people into work. So phrases addressing ‘economic inactivity’ accompany plans to abolish the Work Capability Assessment (which is potentially a good thing, depending on how the replacement system pans out) and ‘separate benefit entitlement from an individual’s ability to work’. As a result, disabled benefit claimants will always be able to seek work without fear of losing financial support”.

Well that’s a relief!

And I am sure that schools will be excited to hear about the ‘wrap around’ pledge, to provide an expansion in wrap-around care at each end of the school day for parents with older children.

There’s also a big fund for filling in potholes (I kid ye not) for councils.

 

A further three months freeze on the energy price guarantee to take us from April to end of July.

And people with pre payment meters will no longer have to pay a premium. Which is good, as it was immoral to charge those who can afford it the least, a premium. I think Martin Lewis can take some credit for that one.

So if there are any changes, or more detail, we’ll keep you informed.

As you were!

(N.B. Subject to edit and more detail being added as things become clearer. Please seek financial advice, before making any changes based solely on information contained within this blog post.) Very happy to talk to you or email you about anything related to your finances or accounts – David@theaccountancypractice.com or call us on 01763 257882