The Chancellor of the Exchequer, Jeremy Hunt, has unveiled the contents of his Spring Budget. There was plenty to unravel, with a heavy focus on getting people back to work and generating long-term sustainable growth. He also addressed the elephant in the room: inflation.
Let’s take a look at what was announced, and the potential impact on you and your business…
In a bid to tackle economic activity, the Chancellor set out a series of measures in what he called a “back to work” Budget. As part of of these plans, the government will:
- Provide £63m for programmes that will encourage retirees over the age of 50 back to work, including through “returnerships” and skills boot camps.
- Introduce a voluntary employment scheme for disabled people, called Universal Support, worth £4,000 for up to 50,000 people.
- Deliver a £400m scheme to provide more mental and physical health support to workers who suffer with health problems.
- Abolish the Work Capability Assessment.
- Give £600 incentive payments to encourage people to become childminders, and relax rules across England to allow childminders to look after more children.
- End the limit on the amount workers can accumulate in pension savings before having to pay extra tax (currently £1.07m).
Business and tax incentives
Although Hunt shared his wish to create “the most pro-business, pro-enterprise tax regime anywhere”, his budget outlines the government’s intention to go ahead with the planned Corporation Tax rise (from 19% to 25%) initially announced in spring 2022. The Chancellor also announced a new £9bn policy that enables businesses to write-off all investment against their tax bills, a move that the OBR apparently believes will boost business tax by 3% a year.
Additional plans include an enhanced credit scheme for research-intensive businesses, worth £27 for every £100 invested, plus a reduction in paperwork for international traders, who will have more time to submit their customs documents under streamlined rules. And, after being frozen for the past nine years, the annual tax-free pension allowance is to rise from £40,000 to £60,000, while the Lifetime Allowance cap will be scrapped.
Elsewhere, there’s good news for the hospitality sector. The extension of “draught relief” makes the rate of duty on draught beer and cider 11% lower than cans or bottles from supermarkets.
Reforms to childcare were perhaps one of the most welcome announcements in the Budget. The Chancellor shared plans to offer parents of children aged nine months to three years (who work at least 16 hours a week) 30 hours of free childcare a week during term time. He noted that this could propel up to 11 million more women into employment. This change will be phased in gradually by September 2025.
Hunt also outlined plans to increase the funding for free nursery places. And to support working parents even further, local authorities will be given extra funds enabling primary schools to provide wraparound care from 8am-6pm by September 2026.
Expert advice from Nabarro Poole
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