Commentary on the main tax provisions.
There were few surprises in the Budget, especially given that, contrary to tradition, most of the announcements were extensively trailed in the media in the days leading up to the speech.
The key provisions were as follows.
It was confirmed that the main corporation tax rate will increase from 19% to 25% with effect from 1 April 2023.
The 130% capital allowances "super-deduction" for companies ends on 31 March 2023, and will be replaced by a "full expensing" deduction for qualifying capital expenditure – effectively a 100% first year allowance.
Assets which only qualify for capital allowances at the "special rate" do not qualify for the super-deduction and will also be excluded from full expensing. They will receive a 50% first year allowance instead.
A number of changes were announced and we will issue a separate paper about this. In brief:
Some of the rules on granting of options are being simplified; requirement to notify grant within 92 days to be dropped from April 2024; notification will instead be required by 6 July following end of tax year, presumably by being included in the annual declaration instead. This is key as if options are not notified they will not qualify for EMI treatment.
The biggest announcement and of tremendous potential value to the relatively small number of people affected.
From 6 April 2023:
This is presented as aimed primarily at senior NHS consultants, to encourage them to stay in work and help reduce waiting lists.
However it is also a massive opportunity for other high earners, and those with substantial pension pots, to add to their pension funds, creating a tax efficient savings vehicle with great possibilities for inheritance tax savings.
This is likely to be short lived, as Labour have already pledged to reverse the changes if elected.
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