The chancellor presented the spring budget 2023 to MPs on Wednesday. The budget accounts for issues such as UK inflation, wages, and public finances. It will have a major impact on everyone’s future life in the UK!
Review the Autumn Budget
We have previously explained in detail the autumn budget to be released in November 2022 in the article.
This includes changes such as taxes and the minimum wage, as well as decisions on subsidizing winter energy bills.
If you want a quick review of fall budgets, just click HERE to jump.
Inflation Rate Falls to 2.9% by Year-end
Customers who have experienced the rapid rise in prices in 2022 must feel the pressure of life.
This is not only reflected in the soaring gas prices faced by running restaurants, but also the increase in food prices.
In the Spring Budget, the Chancellor mentioned the most important impact on quality of life – inflation, which will fall to 2.9% by the end of the year.
As of now, the inflation rate in the UK is 10.1%, which is why we can still feel the pressure on prices.
That being said, this is good news for all of us, lower inflation means everyday life is about to get back on track!
Energy Price Freeze Extended
We mentioned in our previous article that the government provides energy price guarantees for ordinary households. The government has frozen the cap on energy bills at £2,500 until April this year.
The good news is that the Chancellor announced on Wednesday that the plan will continue for the next three months and save ordinary families another £160.
Corporation Tax Raised to 25%
The announcement of the spring budget not only affects life, but also has some changes for enterprises.
From April this year, corporate tax will increase from 19% to 25%.
The change will affect all companies with profits over £250,000, but only 10% of them will be required to pay the full 25% tax rate.
SMEs Will Benefit
If you are running a small to medium-sized business, every pound spent by the company on things like IT equipment or plant machinery will be deducted from taxable profits up to a cap of £1 million over the next three years.
In addition, if your business is working on a technology project, you can get a credit of £27 for every £100 you spend.
Both of these changes will directly affect the budget of enterprises and help small and medium-sized enterprises to ease their operating pressure.
Pension Lifetime Benefits to be Abolished
The chancellor said in the spring budget that the annual tax-free pension allowance would increase from £40,000 to £60,000.
In addition, the government will abolish the lifetime allowance (previously set at £1.07 million).
If you have children in the UK, please take particular note of the following policy changes:
Parents using Universal Credit can now get up to £951 per month per child. Up to £1,630 a month if you have two children in your family, these can now be paid in advance.
The financial deal announced the extension of 30 hours a week of free child care to children under the age of three. The change will eventually cover all 9-month-olds. Note here that it only applies to families where both parents are working.