What does the Spring Budget mean for your business?
Chancellor Jeremy Hunt delivered his Spring Budget announcement on the government’s spending plans this week. From tax changes to support for energy bills, here’s what you need to know:
- Companies investing in new plant and machinery in the three years from 1 April 2023 can claim a first year allowance of up to 100% of expenditure – so businesses can deduct these costs from their profits immediately
- There will be a new tax credit for SMEs that spend 40% of their expenditure on research and development (R&D)
- The annual investment allowance has increased to £1 million. Full expensing has also been introduced for the next three years meaning all money invested in IT equipment by a small business can be deduced in full from taxable profits.
- Dividend allowance for 2023/24 has been cut from £2,000 to £1,000.
- The energy price cap is going ahead in April, so SMEs will receive a discount on wholesale prices of gas and electricity. The Energy Bills Discount Scheme is set to run until 31st March 2024.
- The pensions Lifetime Allowance will be abolished and the annual pensions tax-free allowance will increase from £40,000 to £60,000
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