Spring Budget 2023 Update
posted 15th March 2023
Corporation tax
From April 2023, Corporation tax increases to 25% for company with over £250k profits.
Corporation tax for small companies with profits up to £50k remains at 19%.
Company with profits btw £50k & £250k will pay main rate reduced by a marginal relief.
Example - Co profit of £75,000 will attract 21.5% effective tax of £16,125.
Income tax rates: (non-dividend income) 2023/24
0% starting rate for savings only Up to £5,000
20% basic rate tax £12,571-£50,270
40% higher rate tax £50,271-£125,140
45% additional rate tax Above £125,140
Dividend allowance
Allowance is reduced from £2,000 to £1,000 from April 2023 and to £500 from April 2024.
The threshold of £2k has been in place since April 2018. Dividends rates from April 2022:
8.75% (basic rate)
33.75% (higher rate)
39.35% (additional rate)
Pensions reform
Lifetime pension allowance will be removed from April 2023 and abolished from April 2024.
The pension annual allowance is increased from £40k to £60k from April 2023.
Money purchase annual allowance is increased from £4k to £10k, if you drawing a pension.
Capital gains tax: reduce the annual exempt amount
Annual exemption amount for capital gains tax for individuals changes:
from £12,300 to £6,000 from April 2023, then £3,000 from April 2024.
Inheritance tax
No further changes were announced to the inheritance tax nil-rate band and residence nil-rate band;
thresholds are maintained at the current level until April 2028.
'Full expensing' deduction
Super-deduction will be replaced by a new 'Full Expensing' from 1 Apr '23 to 31 Mar 26.
The relief allows companies to claim 100% first-year deduction from profit before tax.
Research and development
From April 23, research and development (R&D) tax reliefs will be changed as follows:
Small and med-sized enterprises additional deduction decreases from 130% to 86%.
The SME credit rate will decrease from 14.5% to 10%.
R&D expenditure credit rises from 13% to 20%.
