Jeremy Hunt has delivered his second statement as Chancellor of the Exchequer this afternoon. The Spring Budget feels decidedly more optimistic than November’s Statement with the news that the United Kingdom will avoid a ‘technical recession’, going against what was predicted in Hunt’s autumn announcement.
Furthermore, Hunt says OBR expects inflation to fall from 10.7% to 2.9% by end of this year.
The Chancellor indicated that the theme of this Budget is ‘growth’ and the government is on track to get debt falling, and grow the economy.
We have summarised the main points below.
Key points to know:
- Chancellor standing firm on Corporation Tax rise, but only 10% of firms will pay the full 25%.
- Super-deduction scheme replaced with full 100% capital allowances for the next three years.
- Additional support for R&D intensive SMEs announced – for every £100 spent on R&D, eligible companies will be able to claim £27 back.
- Fuel duty will remain frozen.
- 12 new investment zones have been announced in various locations around the country, including Greater Manchester and Liverpool.
- Lifetime allowance abolished for tax-free pensions savings, and annual allowance raised to £60,000.
- Energy Price Guarantee is being extended and so will remain at £2,500 for the next 3 months.
- Full expensing tax relief will be introduced from 1 April.
- There will be criminal charges for promoters of tax avoidance in new consultation.
- There will be £200m invested in regeneration projects in England. For the whole UK, there will be:
- £400m for levelling up projects
- £8.8bn for sustainable transport schemes
- £200m for dealing with potholes
- Draught relief will be made more generous – up to 11p lower than the relief for supermarkets.
- The government will offer 30 hours of free childcare for every child from the age of nine months, where all adults in the household work; this will be phased in over the next two and a half years.
- Hunt announced he wants schools to offer wraparound care from 8am to 6pm by 2026.
- New support to help disabled people into work will be biggest change to the welfare system for decade. The new scheme will be known as Universal Support and could help up to 50,000 people a year.
- There will be a push on older people returning to work, with skills boot camps for people in their 50s.
- ‘Trailblazer devolution’ deals which will give local leaders more control over local policies were announced, with Greater Manchester and West Midlands being the two combined authorities involved.
- ‘Great British Nuclear’ announced which will enable nuclear projects, support the UK’s nuclear industry, and provide opportunities to build and invest.
- £1m prize for AI research to be made available.
- An additional £11bn will be available for defence.
In conclusion, there are lots of reasons to be optimistic about Jeremy Hunt’s Budget, certainly more than what was anticipated following last year’s Autumn Statement.
Rather than any big tax changes, this more measured Budget appeared to focus more on restoring market confidence without any attention grabbing new tax measures.
As always, if you would like any further information regarding the above, please feel free to contact us.