Employment, Education, Enterprise and Everywhere was the continued theme of today’s Budget announcements.

The Chancellor would like to get as many of us back into work, helping to meet his growth ambitions for the UK.

• The Pension Annual Allowance will increase from £40,000 to £60,000 this April, remembering the taper mechanism for those with income over £200,000 and the newly inflated adjusted income threshold of £260,000. The minimum allowance will now also increase to £10,000 from £4,000.
• Those who have accessed defined contribution pension schemes will have an increased Annual Allowance of £10,000 from April 2023.
• The Pension Lifetime Allowance charge will be removed from April 2023 and abolished from April 2024. The maximum Pension Commencement Lump Sum for those without protections will be retained at its current level of £268,275 and will be frozen thereafter.
• Returnerships will promote accelerated apprenticeships, Sector-Based Work Academy Programme placements and Skills Bootcamps to the over 50s.
• Childcare support will be expanded by providing 30 hours a week of free childcare for 38 weeks a year, for eligible working parents of children aged 9 months to 3 years. This will be rolled out in phases from April 2024.
• The government will restrict the geographical scope of Agricultural Property Relief and Woodlands Relief from Inheritance Tax, to property in the UK from 6 April 2024.
• The government is introducing changes to the Self Assessment tax return forms requiring amounts in respect of cryptoassets to be identified separately. The changes will be introduced on the forms for the 2024/25 tax year.
• Amendments will be made to the REIT regime to enhance its competitiveness.
• Fuel Duty & Draught Beer Duty is frozen.

• Companies will be able to offset 100% of the cost of new and unused qualifying plant and machinery against taxable profits without limit from 1st April 2023. This will be in place for three years with the intention to make this permanent. Special Rate Assets will benefit from a 50% first-year allowance during this period also. Expenditure on plant or machinery for leasing is excluded from first-year capital allowances due to longstanding concerns about abuse and wide scope for error. Cars are also excluded.
• From 1 April 2023, a higher rate of relief for loss-making R&D intensive SMEs will be introduced. SME companies for which qualifying R&D expenditure constitutes at least 40% of total expenditure will be able to claim a higher payable credit rate of 14.5% for qualifying R&D expenditure.
• The government will also extend the temporary higher rates of theatre, orchestra, and museums and galleries tax reliefs for 2 further years from April 2023.
• From June 2023, the government will open an election window to permit shipping companies that left the Tonnage Tax regime to return to the UK, bringing with them investment and jobs. From April 2024, the government will also permit third party ship management companies to join the regime and raise the limit on capital allowances to £200 million for lessors of ships into the regime.
• The government is simplifying the process to grant options under an EMI scheme. From April 2023, the requirement for a company to set out details of share restrictions within the option agreement and the requirement for a company to declare an employee has signed a working time declaration will be removed. From April 2024, the government will extend the deadline for a company to notify HMRC of the grant of an EMI option from 92 days following grant, to the 6 July following the end of the tax year.
• The government will be launching a call for evidence on the Share Incentive Plan (SIP) and Save As You Earn (SAYE) employee share schemes, to consider opportunities to improve and simplify the schemes.

• Social Investment Tax Relief will be allowed to expire in April 2023.
• The amount Community Development Finance Institutions (CDFIs) can lend to eligible businesses will increase from £250,000 to £375,000 for non-profit organisations and from £100,000 to £250,000 for profit organisations. In addition, the amount accredited CDFIs can raise through CITR will increase from £10 million to £25 million for retail CDFIs and from £20 million to £100 million for wholesale CDFIs.

• CPI is expected to fall to 2.9% by the end of 2023. Inflation is then expected to fall to 0.9% in 2024 and to remain near 0.0% until mid-2026.

2023/24 Key Personal Tax Data

• Personal Allowance – £12,570
• PA taper threshold – £100,000
• Loss of full PA – £125,140
• Basic tax band – £37,700
• Higher tax band – £37,700 – £125,140
• Additional rate – >£125,140
• Tax-free dividend allowance – £1,000
• Capital Gains Tax annual exemption – £6,000

Tax Rates: