Spring Budget 2023

Chancellor Jeremy Hunt delivered his first Budget on 15 March. Some of the key business-related measures either announced or confirmed during his speech were: 

  • Main rate of Corporation Tax paid by businesses on taxable profits over £250,000 confirmed to increase from 19% to 25%; companies with profits between £50,000 and £250,000 to pay between 19% and 25% 
  • A Full Expensing policy will apply from 1 April 2023 until 31 March 2026 to allow investment in new IT equipment, plant and machinery to be deducted in full and immediately from taxable profits   
  • A number of changes to rates of Research & Development (R&D) Relief were announced including the introduction of an increased rate for loss-making R&D-intensive SMEs  
  • The Energy Bill Price Cap increase for businesses to go ahead in April  
  • A series of childcare reforms to be phased in by September 2025 including 30 hours of free childcare a week for working parents in England to be expanded to cover one and two-year-olds 
  • Expansion of the government’s Skills Bootcamps for over 50s, offering more free training in sector-based skills 
  • A new Investment Zones scheme providing tax breaks and other benefits for 12 high-potential knowledge-intensive growth clusters across the UK. 

Business reaction 

While business groups welcomed some of the announcements, there was also concern that the Chancellor had largely overlooked the small business sector. 

“The Chancellor has acted to address the unfilled jobs blighting our economy. It is especially good to see the help on childcare and for over-50s workers. Almost half of businesses have told us they will struggle to pay their energy bills from April, and they cannot invest when they are fighting to survive. There is little in today’s announcement that will provide comfort to these firms.”  

Shevaun Haviland, British Chambers of Commerce Director General 

“Our economy has been held back in recent years because people running businesses have felt nervous of committing to investment when the climate is so uncertain. The introduction of 100% full expensing for the next three years is therefore very welcome and we urge it to be continued thereafter.  

Having said that it is disappointing that the Chancellor has chosen to target R&D tax credits to some parts of the economy. While good news for the sectors concerned, it could lead to less innovation across the economy more widely.” 

Kitty Ussher, Institute of Directors Chief Economist 

“The distinct lack of new support in core areas proves that small firms are overlooked and undervalued. Budgets are about tough choices, and with today’s  billions of pounds being allocated to big businesses and households, 5.5 million small businesses, and the 16 million people who work for them, will be wondering why the choice has been made to overlook them.”   

Martin McTague, Federation of Small Businesses National Chair