Gary Ellis, Managing Partner
|
“There was welcome news for pension savers today with an increase to the amount that can be saved annually. In a very surprising twist the lifetime cap on the amount that can be saved into pension was completely abolished.
Sadly, owner managed businesses did not see the longed for reversal of the corporation tax rate from 25% but there are further reliefs for those businesses spending in excess of £1m on plant and machinery.
As ever, we will be digesting the impact of these announcements, and contacting you where appropriate if you are significantly impacted by these changes. We are also holding our Budget event at the Riverside Stadium, Middlesbrough, tomorrow at 8am (16th March), where the team will present the updates made in The Budget. ”
|
|
|
A summary of the main headline announcements are set out below and please get in touch if you need further advice.
|
|
THE BUDGET EVENT
Following today's budget, we will be hosting an event at The Riverside Stadium, Middlesbrough, on the 16th March at 8am, where tax partners, Lee Watson and David Baggaley will be providing an overview of the announcements made.
To reserve your place, email marketing@cliveowen.com
|
PLANT AND MACHINERY INVESTMENT
The super deduction was not renewed but a further 100% “full expensing” allowance is available for those companies spending on brand new plant and machinery. This is in addition to the £1m annual investment allowance that can be claimed by both companies and unincorporated businesses. The “full expensing” allowance can only be claimed by corporates.
|
|
 PENSION SAVINGS
Currently, an individual can save up to £40,000 per annum into pensions tax free. This limit will increase to £60,000 from 6 April 2023. In addition, the lifetime savings cap has been abolished in a surprising announcement. Care is needed as the headline annual savings figures do depend upon income earned and who (employer or employee) that pays into the pension. In simple terms, advice is required!
|
SEIS TAX Relief
Post 6 April 2023, the conditions to qualify for the relief are extended.
The company investment limit will increase from £150,000 to £250,000 and the gross assets limits will increase to £350,000 from £200,000.
Finally, the age limit in respect of the qualifying limit will increase from 2 years to 3 years.
|
|
SME R&D ENHANCED RELIEF
There are already alterations to come into force from 1 April 2023 in respect of the claim process and reductions for the tax relief which can be claimed by SME companies.
There was a further change announced at today’s budget in relation to R&D intensive companies being able to claim a 27% tax credit rather than the proposed maximum 18.6% tax credit.
|
CAPITAL GAINS TAX
We already know that the capital gains tax exemption has been halved to £6,000 for capital gains made after 5 April 2023. It will be further decreased to £3,000 for gains made after 5 April 2024. Anyone selling a capital asset for more than £50,000 will be required to make a report to HMRC, even if there is no tax to report.
|
|
 R&D TAX CREDIT
The R&D tax credit for large companies increases from 13% to 20% from 1 April 2023.
|
 INCOME TAX ALLOWANCES
Income tax allowances and lower thresholds are frozen until at least April 2028.
|
|
ADDITIONAL RATE OF INCOME
As a reminder, the additional rate of income tax (45% for most types of income apart from dividends which are 39.35%) will begin at £125,140 rather than £150,000, after April 2023.
|
DIVIDEND ALLOWANCE
The tax free dividend allowance will reduce from £2,000 to £1,000 from 6 April 2023 and is proposed to further reduce to £500 from 6 April 2024.
|
|
 CHILDCARE
Good news for working parents as the Chancellor announced the extension of the 30 hours free childcare to families where both parents are working and the child is over 9 months old. The introduction will be staged over a couple of years.
|
 ELECTRIC VEHICLE CHARGE POINTS
A business installing an electric vehicle charge point can currently claim a 100% capital allowance in the year of installation. This was due to end on 31 March 2023 but has been extended until 31 March 2025.
|
|
COMPANY SHARE OPTION PLANS
The limit of the value of share options granted under CSOP’s will double from £30,000 to £60,000.
|
SEPARATION AND DIVORCE
Normally, assets are passed between married spouses, free of capital gains taxes. In the year in which they formally separate, they are still treated as married until the end of the tax year of separation. This will increase to at least three years, thus giving separating couples a fair chance to get their affairs in order.
|
|
|
If you have any questions please contact a member of our Tax team:
|
|
Rosemary Anderson
Tax Partner
Tel: 01904 784400
Email: rosemary.anderson@cliveowen.com
|
|
David Baggaley
Tax Partner
Tel: 07717 452 437
Email: david.baggaley@cliveowen.com
|
|
Nicola Bellerby
Tax Partner
Tel: 0191 3842244
Email: nicola.bellerby@cliveowen.com
|
|
Alan Moore
Tax Partner
Tel: 01325 349700
Email: alan.moore@cliveowen.com
|
|
Lee Watson
Tax Partner
Tel: 07740 340 245
Email: lee.watson@cliveowen.com
|
|
|
|
