After presenting a Budget in all but name with the Autumn Statement, the Spring Budget 2023 was delivered against the backdrop of a day of widespread industrial action.
The run-up to the event appeared deliberately downplayed, save for a late flurry of leaks highlighting a focus on childcare at one end of the scale and pensions at the other. While acknowledging the Prime Minister’s two objectives of halving inflation and reducing debt, Mr Hunt focused his Spring Budget on the Prime Minister’s third objective – getting the economy going.
At a glance:
- The inflation rate is forecast by the Office for Budget Responsibility to fall from 10.1% (January 2023) to just 2.9% by the end of 2023.
- The lifetime allowance for pensions will be abolished from April 2024, with the lifetime allowance charge withdrawn from April 2023.
- A new monetary limit for the tax-free pension commencement lump sum will be introduced for 2023/24 of £268,275 (equivalent to 25% of the current standard lifetime allowance).
- The annual allowance for pensions will be increased from £40,000 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.
- Up to 30 hours of free childcare per week 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 scheduled 11p a litre duty increases in petrol and diesel will not go ahead.
If you require a more in-depth breakdown of the tax rates our Tax Table document is available to view here.