Spring Budget 2023: Key takeaways for small businesses

16th March 2023

Tax

Corporation Tax to increase from 19% to 25% for businesses with taxable profits over £250,000. Businesses with profits between £50,000 and £250,000 to pay between 19% and 25%. No change for businesses making profits of less than £50,000.

Fuel duty has been frozen again. The 5p cut to petrol and diesel, due to end in April 2023, will remain in place for another year.

Businesses can deduct investment in new machinery and technology to lower taxable profits. The super-deduction has been replaced with full expensing.

Increase in Draught Relief, which we want to make sure is passed to pubs. However, alcohol taxes to rise with inflation.

12 new Investment Zones to be created across the UK, covering West Midlands, Greater Manchester, North East, South Yorkshire, West Yorkshire, East Midlands, Teesside, and Liverpool. At least one investment zone each in Scotland, Wales and Northern Ireland.

The pension Lifetime Allowance before paying extra tax – currently £1.07m – has been abolished. The pensions annual tax free allowance will rise by 50% from £40,000 to £60,000.

After gutting SME R&D Tax credits in November, this will be partly rowed back with enhanced credits for businesses that have R&D as 40% of turnover.

Workforce

Skills boot camps and apprenticeships targeted at over 50s to encourage people to return to the workplace.

30 hours free childcare for working parents in England expanded to cover one and two-year-olds by September 2025. This will be introduced in phases from April 2024, starting at 15 hours.

£600 incentive payments for those becoming childminders and relaxed rules in England on how many children childminders can look after.

A new voluntary employment scheme, Universal Support, announced for disabled people and those with health conditions in England and Wales.

Energy

Energy support for households has been extended for three months until the end of June.

No changes were announced to the Energy Bills Discount Scheme for businesses, which will run from 1 April 2023 to 31 March 2024.

Trade

Commitment to ease customs declarations for small businesses that trade internationally.

Find out more here: Spring Budget 2023: Key takeaways for small businesses (fsb.org.uk)