In one of the most eagerly awaited spring Budgets of recent times, all eyes were on Chancellor Jeremy Hunt when he stepped up to the despatch box in Parliament on Wednesday 15 March 2023.
Nick Haines, a senior partner at Gloucestershire-based accountants and business experts Hazlewoods agreed to share his early thoughts with SoGlos of what it means for businesses and individuals in the county.
‘For a speech that lasted 60 minutes, you would expect there to be a large number of announcements and tax changes, but even when looking at the detail, this will surely be considered one of the lightest tax policy Budgets in living memory,’ said Haines, who is a chartered tax adviser and head of Hazlewoods' tax and property teams.
‘From a general economic perspective, there was some positive news that the Office for Budget Responsibility now believes we will not enter a technical recession in 2023, but will see growth of between 1.8 per cent and 2.5 per cent over the next four years.
‘Further positive news was that inflation is believed to have peaked and is anticipated to fall from 10.7 per cent at the end of 2022 to 2.9 per cent by the end of 2023.
‘The Chancellor focused on what he feels is required for sustainable economic growth, with his four pillars of enterprise, employment, education and everywhere.
‘Investment zones were announced to ensure continued levelling up, with West Midlands being one.
‘The corporation tax rise to 25 per cent still goes ahead, but with a new ‘full expensing’ of qualifying plant and machinery, meaning an effective scrapping of the £1 million limit for the annual investment allowance for most companies.
‘His employment pillar aims at bringing people into the workforce, with assistance for the disabled, apprenticeships for the over 50s, dubbed ‘returnerships’ and a more stringent application of rules to reduce benefits where individuals are not meeting their work search requirements.
‘Education was a reform of the childcare system, with the intention of, ultimately, allowing all children over nine months, to have access to 30 hours of free childcare each week. This will be phased in between April 2024 and September 2025.
‘The free childcare does not apply for those with adjusted net income over £100,000 or those working less than 16 hours per week.
‘Tax policies were scarce, with a freeze in fuel duty for another year, a draught duty reduction to 11p less than supermarkets to help pubs and the freezing of ISA allowances again.
‘The only sizeable announcement was the removal of the lifetime pensions allowance and an increase in the annual allowance from £40,000 to £60,000, tapered once income is over £260,000 down to a new minimum figure of £10,000 (previously £4,000).
‘Given the limits in pension contributions and the taper effect, the removal of the pensions lifetime allowance would appear to be of little impact to people, as they would have been unlikely to breach it anyway.
‘And that, really, was that. Whilst nobody was expecting a bumper giveaway, you normally expect more than was actually announced.
‘Given the economy is still in a relatively precarious position, it may well be that the view was it was too risky to make any significant changes; hopefully it proves to be the right decision.’
