Spring Budget 2023 – Our Summary!
🌼 SPRING BUDGET 2023 🌼
The Spring Budget saw a raft of announcements affecting people and businesses alike. The Chancellor of Exchequer, Jeremy Hunt, was clear that his mission in all the points raised today were to target growth in the economy.
He claims that the UK economy will shrink by 0.2% this year but will avoid a ‘technical recession’.
However, according to Office for Budget Responsibility, the economy is forecast to grow by 1.8% in 2024, and 2.5% in 2025 👏
Inflation is also forecast to fall from 10.7% last year to 2.9% by the end of this year 🙌
There have been some elements in speculation for a few weeks but there are also some points that have come as a very welcome surprise 😃
Here we have summarised some key takeaways from the budget 💯
Pension Annual Allowance
Increasing from £40,000 to £60,000!
This will benefit those who earn in excess of £40,000 as they will be able to contribute more into their pensions whilst also gaining tax relief. Please note that you can only contribute up to 100% of your relevant learnings or the annual allowance (whichever is lower).
The Lifetime allowance was due to be frozen at £1,073,100 until 2026, but in a huge u-turn by the Government, this is now being abolished completely from April 2024 (tax charges will be removed from April 2023). This means that the maximum amount you can accumulate into your pensions now has no limit and will enable people to continue working and utilising their pension allowances without any Lifetime Allowance tax implications.
The maximum tax-free cash for those without protections will still remain at 25% of the current level i.e, £268,275 and will be frozen thereafter.
Money Purchase Annual Allowance
The Money Purchase Annual Allowance for pension contributions will increase from £4,000 to £10,000 in April 2023 – which impacts those who have accessed their pension benefits (excluding tax free cash) and are limited to how much they can contribute going forwards.
Adjusted Income Threshold & Tapered Annual Allowance
The minimum tapered annual allowance for pension contributions will increase from £4,000 to £10,000 in April 2023 – which impacts those who earn over the adjusted income threshold of £240,000. However, this is also due to increase from £240,000 to £260,000 in April 2023.
- The personal allowance which will remain at £12,570.
- The inheritance tax threshold which will remain at £325,000 (Nil Rate Band) and up to £175,000 (Residence Nil Rate Band) per person.
- The ISA allowance which will remain at £20,000.
- And lastly, the capital gains tax allowance that is still set to reduce from £12,300 to £6,000 in April 2023, and then reduced further to £3,000 in April 2024.
- The £2,500 energy cap will remain in place for a further 3 months until June 2023.
- Prices for those who have pre-payment energy meters will be brought in line with those that pay via direct debit.
- Fuel duty will remain frozen therefore, the 5p cut to fuel duty on petrol and diesel will remain for another year.
- Parents with children aged 9 months+ will receive 30 hours of free childcare which will encourage those who want to return to work but are unable to due to the cost of childcare.
We hope that you found this useful and if you have any queries, please do not hesitate to contact us on 01285 708444 or e-mail firstname.lastname@example.org!