Budget 2023: The key points you need to know…

Key highlights from the UK Spring Budget 2023:

Taxation and wages

• Abolishment of the cap on the amount workers can accumulate in pension savings over their lifetime before having to pay extra tax (currently £1.07m).
• Tax-free yearly allowance for pension pot to rise from £40,000 to £60,000 – having been frozen for nine years.
• Fuel duty frozen – the 5p cut to fuel duty on petrol and diesel, due to end in April, kept for another year.
• From August, alcohol taxes in pubs to be 11p in the pound lower than the rate in supermarkets.

Economy and public finances

• Office for Budget Responsibility predicts the UK will avoid recession in 2023, but the economy will shrink by 0.2%
• Growth of 1.8% predicted for next year, with 2.5% in 2025 and 2.1% in 2026.
• UK’s inflation rate predicted to fall to 2.9% by the end of this year, down from 10.7% in the last three months of 2022.
• Underlying debt forecast to be 92.4% of GDP this year, rising to 93.7% in 2024.

Energy

• Government subsidies limiting typical household energy bills to £2,500 a year extended for three months, until the end of June.
• £200m to bring energy charges for prepayment meters into line with prices for customers paying by direct debit – affects 4m households.
• Commitment to invest £20bn over next two decades on low-carbon energy projects, with a focus on carbon capture and storage.
• Nuclear energy to be classed as environmentally sustainable for investment purposes, with promise of more public funding.
• £63m to help leisure centres with rising swimming pool heating costs, and invest to become more energy efficient.

Jobs and work

• Expansion of 30 hours of free childcare for working parents in England to cover one and two-year-olds, in a bid to help them work more.
• Families on universal credit to receive childcare support up front instead of in arrears, with the £646-a-month per child cap raised to £951.
• £600 “incentive payments” for those becoming childminders, and relaxed rules in England to let childminders look after more children
• Funding for up to 50,000 places on new voluntary employment scheme for disabled people, called Universal Support.
• Tougher requirements to look for work and increased job support for lead child carers on universal credit.
• More places on “skills boot camps” to encourage over-50s who have left their jobs to return to the workplace.

Business and trade

• Main rate of corporation tax, paid by businesses on taxable profits over £250,000, confirmed to increase from 19% to 25%.
• Companies with profits between £50,000 and £250,000 to pay between 19% and 25%.
• Companies are able to deduct investment in new machinery and technology to lower their taxable profits.
• Tax breaks and other benefits for 12 new Investment Zones across the UK, funded by £80m each over the next five years.
• Reduced paperwork for international traders, who will also be given longer to submit customs forms under streamlined rules.

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