Spring Budget Summary 2023
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Budget highlights:
- The lifetime allowance (LTA) for pensions has effectively been abolished from 2023/24.
- A new monetary limit for the tax-free pension commencement lump sum (PCLS) will be introduced for 2023/24 of £268,275 (equivalent to 25% of the current standard LTA).
- The annual allowance for pensions will be increased by 50% to a maximum of £60,000 from 2023/24 and the money purchase annual allowance (MPAA) will rise from £4,000 to £10,000.
- The energy price guarantee is maintained at the current £2,500 level until the end of June 2023.
- The scheduled 11p a litre duty increases in petrol and diesel will not go ahead.
- Companies investing in new plant and machinery in the three years from 1 April 2023 can claim a first year allowance of up to 100% of expenditure.
- SMEs that spend 40% or more of their total expenditure on R&D can claim a tax credit worth £27 for every £100 they spend from April 2023.
- Up to 30 hours of free childcare will be available to working parents of children from the age of nine months by September 2025. Initially, from April 2024, working parents of two-year-olds will be able to access 15 hours of free childcare per week.
- The Office for Budget Responsibility forecasts that the CPI inflation rate will fall from the current 10.1% (January 2023) to just 2.9% by the end of the year.
