The Chancellor has just sat down from delivering his Budget speech however there were very few new announcements made today. Based on the speech and supporting documents, there were three key areas of change:
- From 6th April 2023, the annual tax-free allowance on pension contributions is increasing by 50% from £40,000 to £60,000 with the tapering thresholds increasing.
- The lifetime allowance charge is being removed from 6th April 2023 before being abolished altogether.
- 100% first year allowance for companies from April 2023 until March 2026, on main rate plant and machinery.
- 50% first year allowances for companies on special rate assets including long life assets.
- Annual Investment Allowance (AIA) for plant and machinery up to £1 million will remain available for all businesses including unincorporated businesses.
- The assets qualifying for the first year allowance must be new and unused but second hand assets can still qualify for AIA’s.
- New rules will apply for the taxation of disposal proceeds where first year allowances have been claimed.
- 30 hours of free childcare for every child over 9 months old with working parents to be available by September 2025 and introduced in phases.
- Funding for schools and local authorities will be made available to increase the supply of wraparound care.
- Incentive payments will be piloted for those joining the childminding profession.
- Childcare costs of parents moving into work or increasing their hours on universal credit will be paid up front rather than in arrears.
In addition to the above, there are minor changes in several other areas of tax and we will provide more details of these when they are available.
If you would like to discuss how any of these changes may affect you please contact our Tax Director, Jenny Marks.
To see our other news items please visit our Muras Baker Jones – Blog.