by Nick Antoniou, FCCA of NA Associates LLP, Chartered Certified Accountants.



Jeremy Hunt announced his second fiscal statement and first Budget since becoming Chancellor against a backdrop of fragile public finances, an ongoing cost of living crisis, and increased Government borrowing.

With a surprise surplus of £5.4 billion in January due to record self-assessment tax payments, and year-to-date borrowing undershooting the Office for Budget Responsibility (OBR) forecast by £30.6bn, the question has been whether Hunt would pay off some of what the UK owes or funnel it back into the economy.

With that in mind, the Chancellor’s speech highlighted a plan of two halves: a series of short-term measures designed to provide immediate support to businesses and households, and a longer-term strategy for growth.

Main announcements

Personal changes

Back to work

The number of 16 to 64-year-olds in employment has failed to return to pre-pandemic levels, with 8.86m “economically inactive” people not currently seeking paid work.

Meanwhile, the number of job vacancies remains high at 1.1m – 328,000 more compared to early 2020 – meaning that fewer people are working and paying taxes than there could be.

To increase worker participation, Hunt announced his plan to “remove the barriers” to work for groups including older workers, parents, and people with health conditions, causing many to dub the announcement as a ‘back to work’ Budget.

Pensions lifetime allowance

In the run-up to the Budget, many speculated that Hunt would increase the pensions lifetime allowance (LTA) to allow people to increase the amount they receive in retirement. Instead, he scrapped the limit, presently £1,073,100 altogether.

The LTA is the total amount you can put in your private pension pot before tax.

Meanwhile, the annual allowance – the maximum tax-free amount people can pay into private pensions per year – will rise by 50% from £40,000 to £60,000.

However, some believe that these measures will only benefit top earners.

Expansion of free childcare

The Chancellor also announced significant reforms to childcare to encourage parents to return to work.

The Government will expand childcare support to working parents of children over the age of nine months by September 2025.

However, the phased nature of these reforms means they will not come into effect until April 2024 at the earliest, so many parents of young children will not benefit.

The Chancellor also pledged more “wrap-around” care for working parents, bookending school days to allow parents to work longer hours without incurring costly childcare bills.


Hunt will also launch a ‘returnerships’ programme that will offer skills training tailored for the over-50s, taking previous experience into account.

The Government will add a further 8,000 places per year (an increase of 14%) to its ‘skills bootcamps’, which reskill people in sectors such as construction and technology.

Energy support

Following pressure to provide extra support for households struggling with soaring energy bills, the Chancellor announced a three-month extension of the energy price guarantee.

Business changes


Capital investment

With the annual super-deduction due to end before the start of the new tax year, the Chancellor has announced that the Government will introduce a “full expensing” scheme to encourage companies to invest in plant, machinery, and technology.

From 1 April 2023 until 31 March 2026, companies across the country will be able to claim back 100% of their qualifying costs. For the next three years, the Government says 99% of companies will be able to immediately reclaim every pound invested.

R&D tax relief

During the Autumn Statement in 2022, the Chancellor announced measures to reduce fraudulent research and development claims by lowering the amount SMEs can claim in R&D expenditure.

In the Spring Budget, however, Hunt said the Government will introduce a new scheme for loss-making, “R&D intensive” SMEs. Companies that spend at least 40% of their total expenditure on R&D will be considered R&D intensive.

These R&D-focused SMEs will be able to claim a higher payable credit rate of 14.5% rather than the reduced 10% announced in the Autumn Statement.

In practice, this means they’ll be eligible to claim back £27 for every £100 they spend.

Investment zones

The Chancellor followed up with more details on the investment zones, which will be focussed  on technology, creative industries, life sciences, advanced manufacturing, and the green sector.

Eight areas in England have been shortlisted for the investment zones – the East Midlands, Greater Manchester, Liverpool, the North East, South Yorkshire, the Tees Valley, the West Midlands and West Yorkshire.

Creative industry expenditure

Creative industries across the UK will receive continued Government support through reformed tax reliefs and expenditure credits.

Expenditure for high-end TV production will remain at £1m per hour. The Government will also extend the higher rates of theatre, orchestra, and museums and galleries tax reliefs for two further years.

Corporation tax rises as expected

As previously announced, the corporation tax rate will increase from 19% to 25% in April 2023 but with marginal relief for businesses with profits between £50,000 and £250,000.

According to Hunt, only 10% of companies will pay the 25% rate, and the UK has the lowest rate of corporation tax in the G7.

Other Measures

Alcohol and cigarette duty

From August, a new system for calculating taxes on alcohol will come into force, meaning duty rates will increase in line with the Retail Price Index.

From 15 March 2023 duty rates on all tobacco products will increase by RPI +2%, hand-rolling tobacco will increase by RPI +6% and the minimum excise tax will increase by RPI +3% this year.

Fuel duty

Fuel duties will be maintained at current levels for an additional 12 months, cancelling the planned increase in line with inflation for 2023/24.

Energy subsidy and security

Affirming that an enterprise economy “needs cheap reliable energy”, Hunt announced an extension to the climate change agreement scheme for two years to allow eligible businesses £600m of tax relief on energy efficiency measures.

AI competition

One of Hunt’s main goals for the country’s future is an investment in advancements of groundbreaking artificial intelligence (AI) technologies.

The Government plans to award a £1m prize every year for the next 10 years to researchers that drive progress in critical areas of AI.

Charity support

The Government is providing over £100m of support for charities and community organisations in England for those most at risk due to increased demand from vulnerable groups and high delivery costs.




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This article is intended is based on our understanding of the 2023 Spring Budget and does not constitute advice or a recommendation.  Professional advice should be taken on your specific circumstances. You should not make any decisions based upon the contents of this article.

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