What happened in the Spring Budget 2023?

May 26, 2023 | Business expenses

It’s been a couple of months since Hunt’s Spring Budget. But we’re writing this post for a reason.

Like it or lump it, the Chancellor’s announcements could have some sort of effect on your trade business. So let’s not beat about the bush any further. Here’s what happened in the Spring Budget 2023.


Corporation tax

Not all of you will have gone through the pain of incorporating your business. Sometimes it’s just not worth it. But if you have, you could end up with a higher corporation tax bill. Depending on how much bunse you’re making.

The main rate of corporation tax has risen from 19% to 25%. Bit of a jump if you ask us, but it’s been in the works for a while now – it’s not exactly the biggest surprise, you know?

If your company makes £50,000 to £250,000 (fair play if you do) and above, you’ll pay this new rate. Good news is, if you earn something in this bracket, you could get marginal relief on your tax bill.

Any companies earning below £50,000 shouldn’t worry too much. You’ll still pay 19%.


Capital investment

Your business needs a new bit of kit now and then. You can’t keep using the same old clapped-out machinery day in and day out, can you?

Well, good news for those of you who want to splash the cash on some swanky new hardware – Hunt has now brought in a new way for you to claim back some of your investment money.

He calls it ‘full expensing’, which has replaced the old super-deduction for companies in the UK.

Until 31 March 2025 (and maybe after), companies can deduct 100% of the cost of all qualifying assets from their taxable profits — an equivalent tax saving of up to 25p for every £1 spent. That means you could even get yourself a shiny new van, all on the Government’s tab.


Pension allowances

It’s a bit of a pisstake that the Government previously capped how much you could save for your pension before paying tax. We work hard enough, don’t we?

Well, that’s changed for the better, if you ask us. Now you can save as much as you want over your lifetime without HMRC diving into the kitty. The previous cap of £1,073,000 limit has gone, finito. So you can save away until the cows come home.

But don’t sink all your wonga into your pension each paycheck. You still have an allowance as far as a calendar month goes. Before the Budget, you could save £40,000 a month tax-free. Now you have an extra £20,000 wiggle room. Now hard-working traders like yourself can save up to £60,000 without paying a single penny in pension tax.


What else is there?

This one won’t affect your business (we hope), but from 1 August 2023, draught pints at your local boozer will be 11p cheaper than your local Tesco.

Save it for Friday night, though. Nothing worse than dealing with suppliers with a San Miguel headache. Long live ‘draught relief’.

Taxes are complicated. Talking money is a ballache at the best of times. But if you want help making sure your business is on the right track, we’re here to give you some sound advice. Get in touch to chat about the Spring Budget and how it affects your business.

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