Chancellor Jeremy hunt has unveiled the contents of his first budget today. There were quite a few interesting announcements- we have rounded up the important bits for you below!
Corporation tax paid by businesses with taxable profits over £250K will increase from 19% to 25% from April.
Businesses with profits between 50K and 250K will pay a marginal rate between 19% and 25%. Profits below £50K will be taxed at 19% as before.
The Annual Investment Allowance (AIA) will remain at £1 million. This allowance allows companies and unincorporated businesses to reduce their taxable profits by 100% of the cost of plant and machinery additions in the year of purchase.
A new capital allowance named 'full expensing' will be introduced from 1st April 2023 - 31st March 2026. This will be very similar to the AIA, but has no limit and will only be available on qualifying new investments made by companies.
The 50% first-year allowance for company expenditure on new special rate assets will be extended until 31st March 2026.
Research and Development
Small and medium-sized businesses that spend 40% of their total expenditure on research and development will be eligible to claim 'enhanced' R&D credit. This will be worth £27 for every £100 spent.
The 5p cut to fuel duty on petrol and diesel will remain in place for a further year.
The duty paid on average-strength draught beer sold in pubs will be frozen. This will keep prices low for suppliers and consumers.
The cap on the value of a worker's pension pot before having to pay extra tax (called the lifetime allowance) will be abolished. This means no additional tax will be payable on pension pots, no matter their value.
The tax-free yearly allowance for pension contributions will increase from £40K to £60K. This means you can pay more into your pension pot before paying taxes.
Additional announcements included:
- Free childcare for children between 9 months and 3 years
- The energy price guarantee of £2500 will be extended until the end of June
- Families on universal credit will receive childcare costs upfront (instead of in arrears) and the £646 cap per child will increase to £951/month.
For more information, please see the link below or contact us!