Court of Protection

Budget – March 2023

The long-discussed budget of the Chancellor Jeremy Hunt had few surprises, with many of the main announcements pre-empted over recent days.

15 Mar 2023

Team name

The Chancellor’s aim is to get more people into work, whether with help for over-50s, encouraging professionals to postpone retirement, helping the disabled into work or providing parents with additional childcare funding. It is acknowledged that inflation needs to come down to ease pressure on household spending. The Office of Budget Responsibility predicts that inflation will fall to 2.9% by the end of 2023. The impact of the above changes will be seen as the year progresses.

M&P Commentary

In summary:

The Energy Price Guarantee cap of £2,500 will continue for a further three months, now ending in June 2023. However, whilst this will save households an average of £160, the £67 monthly contribution to each household’s energy bills will not be extended. It is predicted that the cost of energy will fall to under the cap from July onwards.
Up to thirty hours of childcare costs for children from the age of 9 months up to school age. This extends the current provision which is for three and four year old children. There will be staged introduction of available hours over the next eighteen months. Working families will qualify for 15 hours of free childcare each week initially (for 38 weeks per year) and this will increase to 30 hours over time. Both parents must be working to qualify. Additionally, funding is also to be provided for school age children to have school support from 8am to 6pm. Full “wraparound” services are intended by September 2026.
Limits for annual pension contributions will be increased from £40,000 to £60,000 and the lifetime allowance will be abolished. It had been expected that this would be raised, but the lifetime allowance will be removed entirely.
The 5p reduction in fuel duty is frozen for a further year.
Alcohol duty rises are likely from August. However, duty on draught beers and ales in pubs will be up to 11% cheaper than in supermarkets.
The planned Corporation Tax increase from 19% to 25% will go ahead. In an attempt to offset this increase the Annual Investment Allowance is increased to £1m. Up to this limit 100% of investments in IT, infrastructure, plant and machinery in the UK can be offset against profits to allow businesses to reduce tax liabilities.
Work Capability Assessments to be abolished for disabled claimants to prevent concerns about the loss of financial support when moving into work.
Newly introduced assistance called Universal Support to provided funding to assist disabled people into work.