Jeremy Hunt is set to outline his tax and spending plans for the year ahead on Wednesday 15th March 2023, as part of the Spring Budget.
What can you expect from the Spring Budget 2023?
Pensions
It has been reported that Jeremy Hunt is considering allowing workers to put more money into their pension pot before taxing it as part of his package that will be announced in the Spring Budget 2023.
The lifetime allowance currently stands at £1.07 million, with savers incurring tax after that personal pension pot threshold has been exceeded. It is currently unknown how much Mr Hunt will increase the lifetime allowance in his fiscal statement tomorrow.
It has also been reported that during the Spring Budget 2023, it could be announced that the annual allowance rate for pensions will be increased. Reports have also been that the UK state pension age could rise to 68 by the mid-30s – sooner than planned.
Defence
As the war in Ukraine continues, the Treasury has been pressured to increase the defence budget. Rishi Sunak previously promised an extra £5 billion for the military over two years, with an additional £1.98 billion this year and £2.97 billion next year for defence. Any indications from the current Chancellor about the future trajectory of defence spending are eagerly anticipated.
Customs
The measures expected to be announced in the Spring Budget 2023 are plans to give the UK’s 363,000 international traders a more streamlined and manageable customs process. The changes are predicted to provide traders six additional days to submit forms after border crossings and fewer authorisations to reduce the administrative burden.
Pay deals
After months of strikes across the NHS, transport and other sectors, there has been some hope in recent weeks that disagreements over pay could end. Unions representing nurses and midwives, ambulance workers and physiotherapists remain in talks with the Department of Health. It is hoped that Jeremy Hunt will use the Spring Budget 2023 to offer details of a pay settlement.
Tax cuts
Conservative MPs have urged Jeremy Hunt to consider and offer tax relief initiatives to businesses as part of his Spring Budget. However, Jeremy Hunt so far has seemed resistant to these calls. Chris Etherington, Tax partner at the accountancy firm RSM, said: “Tax cuts may yet be announced in the spring budget, but it seems likely these will be long-term promises that are unlikely to provide any immediate relief for taxpayers.”
The FCSA has released a Budget Wish List
The FCSA has tweeted a Budget Wish List with the following changes that they would like to see announced in tomorrow’s Spring Budget 2023:
- Index-linking of tax thresholds: FCSA would like to see tax thresholds linked to inflation to prevent people from being pushed into higher tax brackets due to inflation.
- Steady national insurance rates: FCSA would like to see national insurance rates remain steady to provide stability for businesses and freelancers.
- Lower dividend tax rates: FCSA would like to see a reduction in dividend tax rates to encourage investment in UK businesses.
- Maintain the national minimum wage: FSCA would like to see the national minimum wage maintained at current levels to support low-paid workers.
- Maintain the apprenticeship levy: FCSA would like to see the apprenticeship levy maintained at current levels to support the development of skills in the workforce.
- Reduce overall tax burden on businesses: FCSA would like to see a reduction in the overall tax burden on businesses to encourage growth and job creation.
- Simplify the tax system: FCSA would like to see the tax system simplified to reduce the administrative burden businesses and freelancers.
- Increase funding for training and development: FCSA would like to see increased funding for training and development to support the upskilling of the workforce.
- Increase investment in infrastructure: FCSA would like to see increased investment in infrastructure to support the growth of the economy.
- Increase support for innovation and R&D: FCSA would like to see increased support for innovation and research and development to encourage the development of new technologies and industries.
Keep an eye on our blog for the latest Spring Budget 2023 announcements
Keep an eye on our blog tomorrow as we will publish the key announcements made by Jeremy Hunt as part of the Spring Budget 2023.
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