The Spring Budget was delivered by Chancellor of the Exchequer, Jeremy Hunt, on 15th March, with some unexpected announcements regarding pensions. The outlook for the UK economy has improved, with the OBR (Office for Budget Responsibility) now forecasting a slight reduction in growth for 2023 (-0.2%) but that a recession (two successive quarters of negative growth) will be avoided.
Although CPI (Consumer Price Inflation) did increase to 10.4% in February, it is forecast to fall to 2.9% by the end of 2023.
Key figures for the new 2023/24 tax year are now as follows:
Pensions
• Standard annual allowance to increase from £40,000 to £60,000
• MPAA (Money Purchase Annual Allowance, for individuals who have accessed flexible pension income) to increase from £4,000 to £10,000
• The Lifetime Allowance (currently £1,073,100) tax charge will be removed
• Flat rate state pension to increase from £185.15 to £203.85 per week
Individual Tax
• Personal allowance to remain at £12,570
• Higher rate tax threshold to remain at £50,270
• Additional rate tax threshold to reduce to £125,140
• Rates of income tax unchanged
• Capital gains tax allowance to reduce to £6,000
• Dividend allowance to reduce to £1,000
• Personal savings allowance to remain at £1,000 (basic rate taxpayers), £500 (higher rate taxpayers) or £0 (additional rate taxpayers)
Corporation Tax
• Corporation Tax to increase to 25% for larger companies (profits above £250,000)
• Corporation Tax for smaller companies (profits below £50,000) to remain at 19%, with tapered rates for profits £50,000 – £250,000
ISAs
• ISA allowance remains at £20,000
• JISA allowance remains at £9,000
• LISA allowance remains at £4,000
Please note that different tax rates and allowances apply in Scotland.
This article is for information only and should not be construed as advice or a recommendation. You should always seek independent financial advice prior to taking any action.
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