Spring Budget: Key announcements on pensions, R&D, capital allowances and childcare costs

Spring Budget: Key announcements on pensions, R&D, capital allowances and childcare costs

Welcome to our coverage of the Spring Budget. Below you can find our ‘at a glance’ highlights or download our full summary guide for the full story with commentary from our team.

At a glance

For individuals

  • And to be abolished entirely in April 2024. Our tax team says, this is good news for pension savers at or near the current limit and allows companies to significantly increase contributions.
  • The Pensions Annual Allowance will increase by 50% from £40k to £60k from 6 April 2023. This will be welcomed by many, particularly if you are catching up on your retirement provisions, making irregular earnings or making larger contributions later in your career.
    • 15 hours for 2 year olds from April 2024
    • 15 hours for children over 9 months from Sept 2024
    • 30 hours for all children 9 months - 4 years from Sept 2025, reducing childcare costs for families by nearly 60%.
    Our team says - This will help parents return to work, but it is disappointing to see such a delay in the full policy coming in. Given there must be a general election by Jan 2025, we hope this stands the test of time.
  • Government subsidies limiting typical household energy bills to £2,500 a year will be extended for three months, until the end of June.
  • Fuel duty has again been frozen and the 5p cut to fuel duty on petrol and diesel, due to end in April, will be kept for another year.
  • The Potholes Fund will give councils throughout England extra funding to assist deal with potholes.

For businesses

  • Good news for businesses planning to invest in IT equipment, plant or machinery. A replacement for the super deduction was announced with full capital expensing available to businesses from 1 April. Now every £1 invested can be deducted in full from taxable profits for next 3 yrs. We say - A positive measure to offset the corporation tax rise, but sadly not yet a permanent feature which would help business planning.
  • To be introduced for SMEs if they spend ≥40% of total expenditure on R&D, worth £27 for every £100 spent. Our team says - Good news but we will be checking the fine print that there are no additional eligibility criteria / restrictions.
  • This is to be pushed back a year to 1 April 2024 while the government reviews its impact. We say - This is welcomed news and gives more time for companies to review their R&D processes and options.
  • A new £63m programmes to encourage retirees over 50 back to work, via "returnerships" and skills boot camps, will be launched.
  • Immigration rules to be relaxed for five roles in construction sector, to ease labour shortages. We are waiting for further details on which specific roles will be included.
  • From 1 August, there will be 11p reduction in duty on draught beers for pubs
  • Reduced paperwork for international traders, who will also be given longer to submit customs forms under streamlined rules

Get our full Budget guide

You can download our full Spring Budget summary guide here [3mb].

As it happened

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This information has been produced by Rouse Partners LLP for general interest. No responsibility for loss occasioned to any person acting or refraining from action as a result of this information is accepted by Rouse Partners LLP. In all cases appropriate advice should be sought before making a decision.

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