Taxes and Allowances: 

No changes to what we already know from the last Autumn Budget; still money grabbing! 

Corporation Tax:  

• 19% for businesses with profit up to £50k (same as now for all businesses and all profit levels).  From 1 April: 25% for businesses with profit over £250k and for those with profits between £50k and £250k – a tapered rate. 

Personal Income Tax:  

No changes to the personal allowance or tax bands!  That means at a time when people are demanding and being awarded increases in salaries, their tax bands are changing, and more tax being paid than if personal allowances and tax bands had been changed as in previous budgets. 

National Insurance Thresholds: 

Still frozen till 2028! 

Dividend Allowance:

Drops from £2k to £1k!  Means business owners will only be able to take out £1k as dividend tax free. 

Capital allowances:

The super-deduction allowance which allows up to 130% deduction on profits before paying tax for investment in qualifying machinery and equipment, has been scrapped! It is replaced from 1 April, with “full expensing” – a 100% first year allowance but is only available to incorporated businesses. 

Households

A massive increase in energy bills is averted!

Energy Bills:

The energy price guarantee is extended till end of June!  This means the unit cost of electricity is capped till the end of June.  

The energy rebate scheme that saw every household receive a monthly discount of £66/£67 per month on their electricity bills however ends at the end of March.  This means an increase of at least £66 per month on household energy bills. 

Those with prepayment meters whose energy bill rates have historically been at a premium, will from April be charged at the same rate as those paying by direct debit.   

Return to work

This budget encourages return to work!

Childcare:

Free childcare (30 hours per week) for children from 9 months old, in families with all adults working 16 hours or more!  This becomes fully effective from September 2025, but will be staggered in from April 2024. 

“Returnership”:

This is a new apprenticeship for over 50’s wanting to return to work in a new sector! 

Saving

The budget encourages saving for both the high and low end earners, and for business owners! 

Lifetime allowance (LTA):

This has been scrapped!  I talk about LTA in an old blog   It is the maximum amount you can draw as pension without having to pay extra tax.

Alas! This has been completely scrapped, which opens the gate to saving as much as you want for the future, without worry about being taxed heavily when the LTA is breached, good news for doctors and other high earners. 

Tax-free pension allowance:

The current tax-free allowance is £40k per year. This has been increased by 50%, to £60k! It means you can contribute up to £60k to your pension pot each year without having to pay tax.

For business owners, it means you can draw more funds from the business in a tax-efficient way. 

Help to Save:

At the lower end, the help-to-save scheme under its current terms, has been extended till April 2025. This provides a  bonus payment of 50% on savings, up to a maximum of £1,200 over four years, to people on working tax credit and universal credit.  More details about the scheme can be found here. 

 

For the full details of the budget, here’s a full transcript of the speech as delivered by the Chancellor Jeremy Hunt on 15 March 2023.