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Key points from Jeremy Hunt’s 2023 Budget

Updated: Aug 10, 2023




Chancellor Jeremy Hunt has unveiled the contents of his first Budget in the House of Commons.


It had a focus on prompting those who have left their jobs to return to the workforce, and boosting business investment.


Here is a summary of the main announcements.


Taxation and Wages

  • Cap on amount workers can accumulate in pensions savings over their lifetime before having to pay extra tax (currently £1.07m) to be abolished

  • Tax-free yearly allowance for pension pot to rise from £40,000 to £60,000 - having been frozen for nine years

  • Fuel duty frozen - the 5p cut to fuel duty on petrol and diesel, due to end in April, kept for another year

  • Alcohol taxes to rise in line with inflation from August, with new reliefs for beer, cider and wine sold in pubs

  • Tax on tobacco to increase by 2% above inflation, and 6% above inflation for hand-rolling tobacco


Business and Trade

  • Main rate of corporation tax, paid by businesses on taxable profits over £250,000, confirmed to increase from 19% to 25%

  • Companies with profits between £50,000 and £250,000 to pay between 19% and 25%

  • Companies able to deduct investment in new machinery and technology to lower their taxable profits

  • Tax breaks and other benefits for 12 new Investment Zones across the UK, funded by £80m each over the next five years

  • Reduced paperwork for international traders, who will also be given longer to submit customs forms under streamlined rules


Energy

  • Government subsidies limiting typical household energy bills to £2,500 a year extended for three months, until the end of June

  • £200m to bring energy charges for prepayment meters into line with prices for customers paying by direct debit - affects 4m households

  • Commitment to invest £20bn over next two decades on low-carbon energy projects, with a focus on carbon capture and storage

  • Nuclear energy to be classed as environmentally sustainable for investment purposes, with promise of more public funding

  • £63m to help leisure centres with rising swimming pool heating costs, and invest to become more energy efficient


Jobs and Work

  • 30 hours of free childcare for working parents in England expanded to cover one and two-year-olds, to be rolled out in stages from April 2024

  • Families on universal credit to receive childcare support up front instead of in arrears, with the £646-a-month per child cap raised to £951

  • £600 "incentive payments" for those becoming childminders, and relaxed rules in England to let childminders look after more children

  • New fitness-to-work testing regime to qualify for health-related benefits

  • New voluntary employment scheme for disabled people in England and Wales, called Universal Support

  • Tougher requirements to look for work and increased job support for lead child carers on universal credit

  • £63m for programmes to encourage retirees over 50 back to work, "returnerships" and skills boot camps

  • Immigration rules to be relaxed for five roles in construction sector, to ease labour shortages


Economy and Public Finances

  • Office for Budget Responsibility predicts the UK will avoid recession in 2023, but the economy will shrink by 0.2%

  • Growth of 1.8% predicted for next year, with 2.5% in 2025 and 2.1% in 2026

  • UK's inflation rate predicted to fall to 2.9% by the end of this year, down from 10.7% in the last three months of 2022

  • Underlying debt forecast to be 92.4% of GDP this year, rising to 93.7% in 2024


Other Measures

  • Commitment to raise defence spending by £11bn over the next five years

  • Prison sentences for those convicted of marketing tax avoidance schemes

  • £200m this year to help local councils in England repair potholes

  • An extra £10m over next two years for charities in England helping to prevent suicide

  • Streamlined approvals process promised for new medical products

  • £900m for new super computer facility, to help UK's AI industry


Hope this helps. Let me know if you have any questions.


Steve Pearce MICB

15th March 2023






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