SPRING BUDGET 2023

So on 15th March we had the spring budget – here are some of the highlights

Company Taxation

Corporation tax rate was confirmed at 25% from 1 April 2023 for companies with profits above £250,000.

Companies with profits below £50,000 will continue to pay tax at 19%, with those in between paying tax at a hybrid rate of between 19-25%.

Capital Allowances

The Super Deduction of 130% for investment in new plant and machinery was confirmed as ending on 31 March 2023. This will be replaced by Full Expensing which will give 100% first year relief on qualifying main rate new plant and machinery investments. This is currently intended to run for 3 years and there is no limit on the spend.

There will be a first year allowance introduced which will give 50% first year relief on new special rate assets which is intended to run for 3 years with no limit on the spend.

For capital expenditure that does not qualify for full expensing the annual investment allowance remains in place with a limit of £1,000,000.

Full expensing is only available to companies it does not apply to partnerships or sole traders. These types of businesses can still continue to benefit from the annual investment allowance.

Pension Changes

It was announced that the current annual allowance would be increased from £40,000 to £60,000 from 5 April 2023.

Tapering of the allowance will now apply from adjusted net income that exceeds £260,000 (previously £240,000) with the minimum tapered allowance increasing from £4,000 to £10,000.

The lifetime allowance for pension savings has also been removed.

Research and Development

From 1 August 2023 all R&D claims will need to be submitted digitally with an additional information form required. The focus will be on providing more detailed description on the R&D activities and a more detailed breakdown of the expenditure.

For companies who have not submitted an R&D claim in the last 5 years they will need to inform HMRC in advance of their intention to make a claim.

Investment Zones

12 new investment zones have been agreed which include the West and East Midlands. The specific areas that will qualify are still to be confirmed along with the incentives that will be offered to businesses.

If you would like to discuss any of the above further or find out how BSN can assist your business than please contact us.