Jeremy Hunt, Chancellor of the Exchequer, unveiled his first Spring Budget as the country grapples with the cost-of-living crisis, record interest rates and high inflation.
On 15th March, Jeremy Hunt, Chancellor of the Exchequer, unveiled his first Spring Budget as the country grapples with the cost-of-living crisis, record interest rates and high inflation.
Dubbed the ‘back to work’ budget, the Chancellor sets his sights on a brighter economy with a stronger jobs market and higher employment rates. We will just have to wait and see if his ‘budget for growth’ produces positive results – only time will tell.
To summarise, the key measures are:
Pension tax reform – The pensions annual tax-free allowance will increase from £40,000 to £60,000 and Lifetime Allowance will be abolished to help highly skilled individuals continue working for longer. There has been some push back politically on this so we will need to see if it makes it on to the statute books.
Fuel duty freeze – A freeze on fuel duty and the 5p reduction will remain in place for 12 months.
New R&D tax credit – Small and medium-sized businesses that spend 40% of their total expenditure on research and development will be able to claim a credit worth £27 for every £100 they spend.
Small business investment allowance increase – Every pound invested in IT equipment, plant or machinery will be immediately deductible from taxable profits. This measure is worth £9 billion for each year that it’s in place.
Draught relief for pubs – In support of ‘the great British pub’, draught products in pubs will be up to 11p lower than the duty in supermarkets, as part of the ‘Brexit pubs guarantee’. This is in addition to the freeze on UK alcohol duty rates which was extended by six months until August 2023 in the Autumn Statement.
Energy Price Guarantee extension – The Energy Price Guarantee which caps how much suppliers can charge per unit of energy used will stay in place until June 2023. This three-month extension will help thousands of households cope with their energy bills amid the cost of living crisis. The Energy Price Guarantee is currently £2,500 per year and is set to increase to £3,000 per year. The measure is expected to save the typical household £160 per year.
Childcare support for one and two-year-olds – 30 hours of free childcare will be provided for one and two-year-olds to help parents in England return to work, this will eventually cover all children from the age of nine months. This support is only currently available to parents of three and four-year-olds.
As always do get in touch if you would like to discuss anything.