Our analysis of the announcements in the 2023 Budget has been published here.
The majority of the tax rates and allowances were announced in the Autumn Statement, resulting in a mainly expenditure focused budget. The ‘highlights’ are:
Personal tax
- The start of the additional rate (45%) tax band is reducing from £150,000 to £125,400 for 2023/24.
- Also for 2023/24, the tax free dividend allowance is reducing from £2,000 to £1,000.
Pensions
- The Annual Allowance is increasing to £60,000 from £40,000, with related changes to the tapering.
- The Lifetime Allowance Charge is being abolished, although the maximum tax free lump sum remains at 25% of the Lifetime Allowance.
Business tax
- The corporation tax rate is confirmed at 25% from 1 April 2023 for profits over £250,000.
- The super deduction for plant and machinery is being replaced by 100% first-year allowance for qualifying capital expenditure, without upper limit, for three years from 1 April 2023.
- The limit on the value of shares that can be subject to CSOP options when granted to employees will be doubled to £60,000 from 6 April 2023.
- Small Enterprise Investment Scheme limits increased from 6 April 2023.
Capital gains
- The capital gains tax annual exempt amount is reducing from £12,300 to £6,000.
- New accruals basis election is possible for carried interest for 2022/23 onwards.
- Changes to the capital gains treatment of transfers on separation.
Other items
- Energy Price Guarantee is retained at £2,500 for the average household for further three months to 1 July 2023.
- A significant expansion to the free childcare provision is to be phased in starting in April 2024.
- Returnerships are being introduced to encourage over 50’s back to work.
For further details, see our analysis here, or contact us directly.