Our accountants, Price & Co, have summarised the Chancellors plans to:
- Halve inflation
- Reduce debt
- Get the economy going
In a longer than usual speech, there were some key headlines:
- The OBR forecasts that inflation will fall from 10.1% (in January) to just 2.9% by the end of 2023.
- The lifetime allowance charge for pensions will be removed from this April while the Lifetime Allowance, which is currently £1,073,100, will be completely abolished in April 2024. This means you can stay in work longer without incurring additional tax.
- The annual allowance for pensions will increase by 50% to £60,000 from April which means you can accumulate £60K pension savings in a year without paying tax.
- Corporation Tax will be increased for profits of over £50,000 from 19% to 25% which critics say is a "hammer blow" to business growth.
- Companies investing in new plant and machinery in the three years from 1st April can claim a first year allowance of up to 100% of expenditure.
- SMEs spending 40% or more of their total expenditure on R&D can claim a 27% tax credit from April.
- The energy price guarantee will remain at £2,500 until July.
- From September 2025, working parents will be able to claim 30 hours free childcare for children aged between 9 months and 3 years old.
- From April 2024 working parents of 2 year olds will be able to access 15 hours of free child care. From September 2024 this will be extended to children from between 9 months to 2 years old.
- The expected fuel duty increase of 11p per litre ( or 61p per gallon) will not now go ahead.
For more clarity, we recommend you contact your accountant!
