The Spring Budget 2023: A fresh take on your financial future

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.

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.

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.

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.

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.