Today, the Chancellor, Jeremy Hunt announced the Spring Budget. Key points are as follows:
From April 2023, there will be a rise in corporation tax from 19 to 25 per cent. The full impact of the tax rise will affect companies with profits greater than £250,000, while those with profits of between £50,000 and £250,000 will receive some relief. Businesses with profits of less than £50,000 will see no change and continue to pay corporation tax at 19 per cent.
Businesses will also be able to offset 100% of UK investments against their profits to bring down tax bills.
An “enhanced credit” has been introduced for SMEs if they spend 40% or more of their total expenditure on research and development. They can claim credit worth £27 for every £100 spent.
The Government will create 12 new “investment zones” across the UK. They will be led by partnerships between local authorities, universities and businesses, aiming to stimulate innovation.
The eight locations proposed in England are in the East Midlands, the North East, Greater Manchester, Liverpool City Region, South Yorkshire, Tees Valley, the West Midlands, and West Yorkshire.
To encourage the over-50s who took early retirement back to work, the Chancellor has announced tax changes to pensions by scrapping the lifetime allowance of £1m, which is the maximum amount that workers can put into their pension pots before they are taxed.
The pensions annual tax-free allowance will increase by 50% from £40,000 to £60,000.
The government will introduce a new voluntary employment scheme – universal support – for disabled people, which will be worth £4,000 for up to 50,000 people.
A scheme worth £400m to help support workers with mental and physical health problems will also be introduced.
Parents of children aged nine months to three years will be offered 30 hours a week of free childcare in term time – as long as both parents are working at least 16 hours per week. The change will be introduced gradually, by September 2025.