The Spring Budget 2023: A fresh take on your financial future
Spring Budget 2023: Key Insights for Bournemouth & Poole Businesses
Navigate the Spring Budget 2023 and strengthen your financial foundation.
Welcome to the exciting world of finance, where the Spring Budget 2023 has left us with much to ponder. Like blooming flowers, the Spring Budget 2023 has brought growth and opportunities. While not many tax measures were announced, the Chancellor’s second speech focuses on incentivising work for . . .
🟦 | Parents
🟦 | Older people
🟦 | And carers
For individuals . . .
There were major announcements relating to pensions.
The annual allowance (AA) — the maximum amount tax relieved contributions that can be made in a pension input period — will increase from £40,000 to £60,000 from 2023/24. Additionally, the Lifetime Allowance (LA) charge has been removed for 2023/24 and will be scrapped altogether from 2024/25. The money purchases annual allowance will also increase from £4,000 to £10,000 from 2023/24. The changes found in the Spring Budget 2023 aim to encourage individuals to save more for their retirement.
For businesses . . .
The budget announced a reform of the system of capital allowances.
Companies will be entitled to a 100% first-year allowance for capital expenditure. This will be on IT equipment, plant, and machinery from 1 April 2023 until 31 March 2026. The 50% deduction introduced for special rate expenditure alongside the super-deduction will also be extended through this period. A consultation on expanding the cash basis for unincorporated businesses has also been announced. The Spring Budget 2023 could lead to a relaxation of loss relief restrictions and a cap on deductible interest payments.
While the Spring Budget 2023 has been quiet on tax measures, it has brought new growth and opportunities. To reach a brighter financial future for all, these changes aim to . . .
🟦 | Incentivise saving for retirement
🟦 | Promote investment in IT equipment, plant and machinery
Whilst we’ve done our best to summarise the highlights of the Spring Budget 2023 above, there’s much more to it. If you want to delve into an overview of all measures included in the Spring Finance Bill 2023, this page covers . . .
🟦 | Each tax policy measure announced at the Spring Budget 2023
🟦 | Previously announced measures in the Spring Finance Bill 2023
With our help, we can help fortify your business’s financial foundation in Bournemouth and Poole. Stay informed on the latest updates and consultations with Birkett & Co.
Key Measures in the Spring Finance Bill 2023
Spring Budget 2023: Personal tax updates to empower your finances
Section 1: Personal Tax — A roadmap to income tax, pensions, and savings
1.1 | Income Tax Charge and Rate
Spring Budget 2023 brings fresh updates to income tax charges and rates. In the Spring Finance Bill 2023, the government outline . . .
🟦 | The primary rates for 2023-2024
🟦 | Savings rates for UK taxpayers
🟦 | And default rates for specific taxpayers
For Scottish and Welsh taxpayers, their respective parliaments set income tax rates and thresholds.
1.2 | Starting Rate for Savings Limit
The Spring Budget 2023 maintains the 0% band for the starting rate for savings income at £5,000 for 2023-2024.
— Applicable across the UK.
1.3 | Reforming Pension Tax Thresholds
To reshape pension tax thresholds, the Annual Allowance will increase from £40,000 to £60,000. The Money Purchase Annual Allowance and the minimum Tapered Annual Allowance (TAA) will rise from £4,000 to £10,000. The adjusted income threshold for TAA will also increase from £240,000 to £260,000.
The Lifetime Allowance (LTA) charge will be removed for 2023-2024, with LTA abolished from April 2024 — meaning there is no limit to the value of your pension pot moving forward.
1.4 | Pensions Relief Related to Net Pay Arrangements
From the tax year 2024-2025 onwards: Top-up payments will be made to individual’s pension pots/funds with a total income below the Personal Allowance. However, they must save into a pension scheme using a net pay arrangement, better-aligning outcomes with Relief at Source.
This measure takes effect from 6 April 2025.
1.5 | Collective Money Purchase (CMP) Winding Up
Spring Finance Bill 2023 will clarify the tax treatment on . . .
🟦 | Transfers
🟦 | Periodic income
🟦 | Valuation of dependent pension benefits
🟦 | (Involved during the wind-up of a CMP scheme)
This is effective from the Royal Assent of the Spring Finance Bill 2023.
Spring Budget 2023: Navigating personal tax changes in capital gains tax
Section 1: Personal tax — Exploring capital gains tax updates
1.8 | Expanding Relief for Joint Interests in Land and Private Residences
LLPs and Scottish partnerships are now included in . . .
🟦 | Capital Gains Tax roll-over relief
🟦 | And private residence relief
Applicable to disposals made on or after 6 April 2023.
1.9 | Capital Gains Tax: Separation and Divorce
Spring Budget 2023 amends the rules for asset transfers between . . .
🟦 | Separating spouses
🟦 | And civil partners
This takes effect for disposals made on or after 6 April 2023 and means that individuals separating will pay no (or significantly less) capital gains tax.
1.10 | Introducing an Elective Accruals Basis for Carried Interest Rules
The Spring Budget 2023 introduces a new elective accruals basis of taxation for carried interest. This allows UK resident investment managers to . . .
🟦 | Accelerate tax liabilities
🟦 | And align with other jurisdictions
This measure applies from 6 April 2022.
Spring Budget 2023: Key personal updates
Section 1: Personal tax — Exploring other personal tax measures
1.14 | Increasing Qualifying Care Relief
Spring Budget 2023 raises income tax relief for foster and shared lives carers using Qualifying Care Relief. The changes begin on 6 April 2023, with increased annual fixed and weekly amounts.
These amounts will rise by CPI inflation each tax year from 2024 to 2025.
Spring Budget 2023: Corporate tax highlights simplified
Section 1: Corporate tax — Breaking down the changes
1.15 | Corporation Tax Rates
Spring Budget 2021 outlined corporation tax rate changes from 1 April 2023. Profits between £50,000 and £250,000 will be taxed at 26.5%.
The introductory rate will be 25%, and the small profits rate will be 19% starting 1 April 2024.
1.21 | Energy Profits Levy: Decarbonisation Investment Allowance
An 80% investment allowance will be introduced for upstream decarbonisation.
From 1 January 2023.
1.22 | Full Expensing & Annual Investment Allowance
Companies can claim full expensing for new plant and machinery investments from 1 April 2023 to 31 March 2026.
The temporary £1,000,000 Annual Investment Allowance limit becomes permanent from 1 April 2023.
1.23 | Permanent Annual Investment Allowance
Spring Budget 2023 solidifies the £1,000,000 Annual Investment Allowance limit. This move aims to stimulate business investment and drive economic growth across the UK.
Effective from 1 April 2023.
1.24 | Electric Vehicle Charge-Points First-Year Allowance
The first-year allowance for electric vehicle charge-points is extended until . . .
🟦 | 31 March 2025 for corporation tax
🟦 | And 5 April 2025 for income tax
1.25 | Theatre, Orchestra, and Museums & Galleries Tax Reliefs
Higher relief rates for . . .
🟦 | Theatre
🟦 | Orchestra
🟦 | Museums & Galleries
Tax Reliefs are extended for two years.
1.26 | MGETR Sunset Clause Extension
The Museums and Galleries Exhibitions Tax Relief (MGETR) sunset clause is extended.
Until 31 March 2026.
1.27 | Research & Development (R&D) Tax Relief Reform
R&D tax relief reforms will be introduced for accounting periods. There will also be new categories of qualifying expenditure and digital claim requirements.
Starting on or after 1 April 2023.
1.28 | Investment Zones: Fueling the UK’s Economic Growth
Spring Budget 2023 introduces 12 Investment Zones, each receiving £80 million over five years. Unique tax sites will be designated, offering tax reliefs like SDLT relief and enhanced capital allowances.
These incentives aim to attract businesses and boost economic growth across the UK.
1.29 | Seed Enterprise Investment Scheme Expansion
The Spring Finance Bill 2023 will increase SEIS investment limits from £150,000 to £250,000, enabling more businesses to benefit. The annual investor limit will double to £200,000, stimulating further innovation and growth.
Effective from 6 April 2023.
1.30 | Company Share Option Plan Reform
The Spring Finance Bill 2023 will raise the CSOP options limit to £60,000 and remove the ‘worth having’ restriction. It aims to provide more opportunities for growth companies.
These changes take effect from 6 April 2023.
1.31 | Streamlining Enterprise Management Incentives
The Spring Finance Bill 2023 simplifies the process for granting EMI options.
It benefits new and existing options granted before 6 April 2023.
1.32 | Enhancing Real Estate Investment Trust Rules
Spring Finance Bill 2023 will amend the REIT regime to . . .
🟦 | Improve competitiveness
🟦 | Reduce administrative burdens
🟦 | And adjust property disposal rules
These changes will take effect from 1 April 2023 or Royal Assent.
1.33 | Adjusting Qualifying Asset Holding Companies Rules
The Spring Finance Bill 2023 will amend QAHC rules to align with the intended scope better.
Changes will take effect on various dates.
1.35 | Double Taxation Relief: Claim Time Limits
The Spring Finance Bill 2023 limits extended time limit claims for double tax relief.
Effective from 20 July 2022.
1.36 | Life Insurance Taxation: Transfers and Reinsurance
The Spring Finance Bill 2023 addresses the tax mismatch in life insurance rules and industry concerns.
Effective from 15 December 2022.
Spring Budget 2023: Indirect tax updates and reforms
Section 1: Navigating the changes in alcohol, tobacco, and environmental taxes
1.38 | Revamping Alcohol Duty
Spring Budget 2023 introduces reforms to the alcohol duty structure, starting 1 August 2023. HMRC is modernising the approval, return, and payment processes for domestic alcohol producers.
A new digital system is set to launch in late 2024.
1.39 | Alcohol Duty Rate Adjustments
Alcohol duty rates will rise under the revised structure for all alcoholic products produced in, or imported into, the UK. This aligns with the Retail Price Index (RPI). Draught Relief increases for qualifying beer, cider, wine, spirits-based, and fermented products.
Starting 1 August 2023.
Spring Budget 2023: Bold Changes and Transformations
Unveiling key tax and legislation updates to reshape the UK’s financial landscape
1.56 | Penalty Reform for VAT
Technical changes will be made to . . .
🟦 | Late payment interest
🟦 | Penalties
🟦 | And repayment interest rules for VAT
This ensures accurate charges and penalties.
1.67 | Homes for Ukraine: Property Tax Exemptions and Reliefs
Temporary reliefs from ATED and the 15% rate of SDLT will be introduced for dwellings provided under the Homes for Ukraine Sponsorship Scheme.
1.68 | Homes for Ukraine: Income Tax and Corporation Tax Exemption
Payments made by Local Authorities to sponsors under the Homes for Ukraine scheme will be exempt from income and corporation tax.
1.69 | Lump Sum Exit Scheme Payment Taxation
Payments received by retiring farmers under the Lump Sum Exit Scheme will be treated as capital receipts.
1.70 | Strengthening HMRC’s Ability to Implement Financial Sanctions
Legislation will clarify HMRC’s functions concerning Designated Persons subject to financial sanctions. This will ensure automatic reflection of future changes to UK sanctions legislation.
How can we help?
It's no secret that individuals and businesses want to pay the least amount of tax possible. This is what fuels all our taxation services and is why we've built a reputation for minimising our client's tax liabilities. It's our savvy and skilled advice that keeps both our clients and the authorities happy.
I’m running a business
Running a business requires excessive plate spinning – far more than most people bargain for. As a business leader, we know you’d rather be getting on with the stuff you love doing: thinking creatively, nurturing your ideas and loving every minute of it – which is where we come in.
Helping business ideas take off is incredibly rewarding, not least because of the creativity of our clients’ start-ups. We’re proud to support a rich variety of innovative and entrepreneurial ventures. We work one-on-one with clients to ensure their businesses don’t just survive but thrive.
There’s no doubt that scaling your business is tough. It requires tactical decision-making and a watertight strategy with one goal in mind: growth, and lots of it. Our proactive approach has seen many of our clients’ businesses thrive beyond expectations.
Get in touch for assistance with the Spring Budget 2023
Here at Birkett & Co. Ltd, your success is our business.
Want to make your money work harder, faster and smarter? So do we. Here on the South Coast, our savvy, forward-thinking team of advisors are on-hand to support you with any financial questions. Whether you’re an individual or a business, you can expect candid communication and industry-leading advice.
We’ll ensure your finances are not only on your side, but you have the power to make your money work harder and go further than you thought possible.
Facilitating your business’ growth one-on-one is what drives our team of experienced professionals. We’re incredibly proud to be so much more than an accountancy firm. Since our formation in 1979, our unique, proactive approach has helped thousands of businesses prosper. Our team welcomes emails or calls from new and existing clients and endeavours to respond within two working hours.
Contact Birkett & Co Ltd to help you with the Spring Budget 2023.
We Guarantee . . .
- A holistic approach that's best for the business and you
- Strong foundations that are fit for you now and in future
- To communicate with clients in words they understand
- Industry-leading knowledge with industry-leading software