We only use cookies for website functionality and security.


How will the Spring Budget affect your business?

GettyImages-184973453 hero.jpg

With the need to encourage growth and tackle inflation at the centre of the Chancellor’s Spring Budget statement, what new announcements were made – and how will they help SMEs?

Announcing a range of measures on childcare, pension allowances, and skills training the Chancellor, Jeremy Hunt, seeks to encourage parents and early retirees back into the UK’s workforce to help boost economic activity.

Measures to support SMEs also form part of the Chancellor’s plans with a freeze to fuel duty, research and development tax credits, and a replacement for the outgoing tax Super-deduction scheme announced with the intention of driving growth and investment.

While able to announce that the UK was on a stronger financial footing than when he delivered his Autumn Statement, confirmation that the economy was due to contract by 0.2% highlighted the need for SMEs to drive growth – and the Premier Asset Finance team is ready to work with them to ensure they can access the funding necessary to invest.  

Super-deduction replacement

With the tax Super-deduction set to end on 31 March, the Chancellor announced a partial replacement of the scheme by introducing a new investment allowance: Full Capital Expensing.

Allowing 100% of qualifying capital expenditure in the UK to be written off against taxable profits for the next three years, the new scheme expands on the current Super-deduction criteria to include IT infrastructure, as well as plant and machinery.

Annual Investment Allowance

Smaller businesses have had their Annual Investment Allowance increased to £1m, allowing them to deduct the full value of their investment from taxable profits.

Corporation tax rise

A planned Corporation Tax rise from 19% to 25% was confirmed by the Chancellor on businesses generating a profit of over £250,000. Read our blog on Corporation Tax here.  

Research and Development

The Budget also included the announcement of a tax credit for SMEs worth £27 for every £100 they spend if they invest 40% of their expenditure in research and development.

Encouraging early retirees back to work

Substantial changes were announced to pension allowances, with an increase in the annual tax-free allowance from £40,000 to £60,000 and total abolition of the Lifetime Allowance (LTA).

By abolishing the LTA and raising the annual allowance, the Government seeks to help workers put more money into their pension, encourage skilled retirees back into the workforce, and to delay when those currently in work wish to retire.

The budget also included details of funding to increase the number of places on skills training programmes by 8,000 to help those wishing to return to work to gain the skills sought by businesses.  

Support for parents returning to work

Unveiling plans for 30 hours of free childcare for children aged 9-months to two, alongside increased funding for the existing programme for three and four-year olds, the Chancellor aims to cut costs for those in work and encourage more parents to return to employment. This will be phased in from April 2024 to enable childcare providers to adapt.

Extra funding was also announced for ‘wrap-around’ childcare both before and after the school day.

Fuel duty cut

Aimed at supporting both businesses and household budgets, the budget saw the scrapping of the planned rise to fuel duty and maintaining the 5p cut per litre announced last year - with the chancellor arguing that the freeze will support business by helping to tackle inflation, which is now predicted to fall from 10.1% to 2.9% by the end of 2023.  

Investment zones

Aimed at driving growth in green industries, digital technologies, life sciences, and advanced manufacturing, the budget included the announcement of 12 new Investment Zones that will each receive £80 million in funding over the next five years.

Of the announced zones, one will be located in Scotland, Northern Ireland and Wales with a further eight to be located throughout England, including the West Midlands, Greater Manchester, the North East, South Yorkshire, West Yorkshire, East Midlands, Teesside and Liverpool.

Premier Asset Finance Limited is authorised and regulated as a credit broker (including for consumer credit activity) and not as a lender, by the Financial Conduct Authority. Registered in England, number 06453431. Registered office: 51 Homer Road, Solihull, West Midlands B91 3QJ. Premier Asset Finance Ltd is registered on the Financial Services Register under the Firm Reference Number 728589.

We are not an independent financial advisor, but we can introduce you to a panel of lenders and their finance products. We will provide details of products available from the lenders we work with without advice or recommendation, and it is for you to decide whether the finance product is right for you. We do not charge you a fee for our services, however we do receive a commission from the lender if you decide to enter into an agreement with them (either a fixed fee or fixed percentage of the amount you borrow) and different lenders pay different rates. Premier Asset Finance is a wholly owned subsidiary of Paragon Bank Plc.