The Chancellor confirmed that the planned increase in Corporation Tax to 25% for companies with profits over £50,000 will go ahead next month as planned. This means that from 1st April 2023:
Replacing the super-deduction that ends on 31st March, ‘full expensing’ will be introduced from 1st April 2023, for an initial period of three years. This means that 100% of the money invested by qualifying companies in qualifying equipment can be used to reduce the amount of taxable profits. Companies that invest in other assets that don’t qualify for the full 100%, such as long-life assets, will also benefit from a 50% first-year allowance during this period.
From April 2023, the Annual Investment Allowance will be permanently set at £1 million. This provides 100% relief against the cost of qualifying equipment, so for small businesses, it will cover most purchases of assets.
Research and development (R&D) relief
From 1st April 2023, loss-making small or medium-sized enterprises (SMEs) will be able to claim a credit worth £27 for every £100 they spend on R&D, provided that R&D constitutes at least 40% of their total expenditure.
Some good news for business owners who pay for fuel for business travel: the planned 11p rise in fuel duty will be cancelled, maintaining last year’s 5p cut for another year.
Energy Bills Discount Scheme
As previously announced, the new Energy Bills Discount Scheme for businesses will take effect from April 2023, giving eligible non-domestic consumers a per-unit discount on wholesale prices for a further year.
Small business consultations and reviews
The Spring Budget promised to launch a consultation to expand cash basis accounting. It also promised “a systematic review of HMRC guidance and key forms for small businesses, to ensure the tax system is easy for them to understand”.
To learn more about the changes announced in the Spring Budget, you can read the full report on the government’s website
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