Posted on: 15/03/2023
Today, Wednesday 15th March 2023, Chancellor of the Exchequer, Jeremy Hunt delivered his Budget in the House of Commons. During his opening statement, Hunt stated that "Today we deliver the next part of the plan, a budget for growth". The Chancellor says his budget will achieve growth by "removing obstacles that stop businesses investing; by tackling labour shortages that stop them recruiting; by breaking down barriers that stop people working; and by harnessing British ingenuity to make us a science and technology superpower."
The Chancellor says the Office for Budget Responsibility forecasts that because of changing economic factors and the measures he takes; the UK will not now enter a technical recession this year.
We have rounded up the key points for businesses below:
The rate of inflation is forecast to fall to 2.9% by the end of 2023, according to the Office for Budget Responsibility.
The Government is on track, with underlying debt to be 92.4% of GDP by next year, falling every year after until 2027-28.
In the Autumn Statement, the Chancellor said public sector net borrowing must be below 3% over the same period. Today, he says the OBR confirmed we are meeting that rule with a buffer of £39.2bn and our deficit falls in every year of the forecast, borrowing falling from 5.1% in 2023-24 to 1.7% 2027-28.
After this year the UK economy will grow in every single year of the forecast period: by 1.8% in 2024; 2.5% in 2025; 2.1% in 2026; and 1.9% in 2027.
The Chancellor announced an additional £320m funding for the Scottish government, £180m for the Welsh government and £130m for the Northern Ireland executive.
Corporation tax for businesses is to increase from 19% to 25%. Firms which make a profit of more than £250,000 will pay 25% tax on their profits from April.
For smaller businesses, the Annual Investment Allowance has been increased to £1m, meaning 99% of all businesses can deduct the full value of all their investment from that year’s taxable profits.
The Chancellor is also introducing "full expensing", with an intention to make it permanent as soon as we can responsibly do so. He says it means that every single pound a company invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profits.
A £500 million per year package of support for 20,000 research and development (R&D) intensive businesses, will take place through changes to R&D tax credits.
Reforms to tax reliefs for the creative sectors will ensure theatres, orchestras, museums and galleries are protected against ongoing economic pressures and even more world-class productions are made in the UK.
£900 million of funding for an AI Research Resource and an exascale computer – making the UK one of only a handful of countries to have one – and a commitment to a £2.5 billion ten-year quantum research and innovation programme through the government’s new Quantum Strategy.
Greater responsibility for local leaders to grow their local economy.
Over £200 million for high-quality local regeneration projects in areas of need, from the transformation of Ashington Town Centre to a skills and education campus in Blackburn.
Over £400 million for new Levelling Up Partnerships for twenty areas in England most in need of levelling up, such as Rochdale and Mansfield.
Business rates retention expanded to more areas in the next Parliament.
Delivering trailblazer devolution deals for the West Midlands and Greater Manchester Combined Authorities that include single multi-year settlements for the next Spending Review, alongside a commitment to negotiate further devolution deals in England.
12 Investment Zones across the UK including the West Midlands, Greater Manchester, the north-east, South Yorkshire, West Yorkshire, East Midlands, Teesside, and Liverpool.
£8.8 billion over the next five-year funding period for a second round of the City Region Sustainable Transport Settlements.
The Lifetime Allowance charge will be removed before being abolished altogether, removing barriers to remaining in work and simplifying the tax system by taking thousands out of the complexity of pension tax.
The Annual Allowance will be increased from £40,000 to £60,000, incentivising highly-skilled workers to remain in the labour market.
A new ‘Returnerships’ apprenticeship targeted at the over 50s will refine existing skills programmes, to make them more accessible to older workers, giving them the skills and support they need to find a recognisable path back into work.
A new voluntary employment scheme for disabled people and those with health conditions called Universal Support will be funded in England and Wales.
A £406 million plan to tackle the leading health causes keeping people out of work.
Strengthening work search and work preparation requirements for around 700,000 lead carers of children aged 1-12 claiming Universal Credit in Great Britain.