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The UK Spring Budget 2023 was recently announced, and it contains a range of changes to the country’s tax system. These measures will have a major impact on businesses, individuals and indirect taxes.

It is important to understand the implications of the new budget, so that everyone can make the best decisions to ensure they are not paying too much tax.

This blog post will provide an overview of the key changes to the UK Spring Budget 2023.

Business tax

  1. Capital allowances
    • From 1 April 2023 until 31 March 2026, any company investing in plant and machinery will be fully expensed. This means that the cost of such investments; can be deducted from their taxable profits in the same year they are incurred. Allowing businesses to save significantly on their finances. It also provides an incentive to invest more in their business.
  2. Research & Development
    • A recent change has been made concerning R&D intensive loss-making companies. For which the expenditure on Research and Development constitutes at least 40% of total expenditure. In that case, a 14.5% payable rate will be granted. From April 1, 2023, businesses can claim once the finance bill is passed by Royal Assent.
  3. Audio-visual
    • Following a public consultation, reforms to audio-visual tax reliefs, which included new expenditure credits instead of additional deductions. Will take action from 1 April 2024. Film and higher-end TV will have a rate of 34%. Animation and children’s TV will be eligible for a rate of 39%. A new Video Games Expenditure Credit will have a rate of 34%.
  4. Theatrical arts
    • Finally, there will be an extension for the higher rates of Theatre, Orchestra, and Museums and galleries exhibitions tax relief. The current rates of these reliefs have been extended by a further 2 years. This means that the theatre production companies will be able to benefit from a 25% tax relief on their total expenditure. Whereas orchestra and museum and galleries exhibition companies can benefit from a 30% tax relief. This will allow these organisations the time they need to adjust and re-evaluate their budgeting plans.

 

Personal tax

  1. Pensions
    • From the 6th April 2023, the lifetime allowance charge for all members of registered pension schemes will be removed. Limiting the pension commencement lump sum to its current maximum of 25%, unless individuals hold valid protection against this change. In addition, the annual allowance is being increased from 40k to 60k. The money purchase annual allowance and tapered annual allowance from 4k to 10k. And the adjusted income for tapered annual allowance from 240k to 260k.
  2. Tax repayments
    • Taxpayers can no longer legally assign a third party their income tax repayment. Or their right to an income tax repayment. The effect of this measure is that assignments of income tax repayments will have no legal effect. The repayment will remain the property of the taxpayer. This measure is designed to protect individuals from the financial uncertainty caused by the changes to business and personal taxes. As well as other financial changes that may occur.

 

Indirect tax

  1. Fuel duty
    • The government has extended the temporary cut in the rates of Fuel Duty introduced at Spring Statement in March 2022. This means that fuel duty will remain at current levels for another year. Resulting in a reduction of around 12 pence per litre (ppl) for main petrol and diesel rates in comparison to previous plans. This decision was made to help individuals and businesses who have been hit hard by the pandemic. As fuel costs can be one of the biggest expenses for companies who rely on transport for their operations. Furthermore, it provides relief to the average driver who is already feeling the strain of increasing living costs.
  2. Alcohol duty
    • Duty rates on all alcoholic drinks such as beer, cider, spirits, and wine will increase in line with the RPI. This measure is designed to ensure a fair return for businesses in the sector. As well as reduce any financial strain on the consumer. Additionally, the duty differential for Draught Relief, which was announced at the Spring Statement 2021 and frozen from 1 August 2022 until 1 August 2023, will also be increased from 1 August 2023. This measure is intended to provide support for pubs and the brewing industry, which have been adversely impacted by the pandemic.

 

How RHJ Accountants can help

The recent spring budget brought about changes in business, personal and indirect tax which will affect many people in the UK. It is essential that those affected are aware of the changes and understand how to take advantage of them to ensure their tax payments remain as low as possible.

At RHJ Accountants, we have the expertise and knowledge to give tax planning advice on all subjects. Our team of professionals will work with you to ensure you take full advantage of the new measures announced in the budget. We can help you maximise the opportunities presented to you and make sure that you are not paying more tax than you should be.

We understand that the changes to the budget can be confusing and it is important that people seek professional advice so they know how to best manage their finances. That is why we suggest arranging a meeting with one of our experts at RHJ Accountants who can provide efficient tax saving advice tailored specifically to you.

By utilising the services of RHJ Accountants, you are getting the best advice available when it comes to managing your finances; following the changes in the spring budget.

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💬 PSA: between April & June our Portuguese team have limited meeting availability due to the Tax Return Submission Period 🇵🇹