The Chancellor announced his March budget today.
Similar to the budgets, autumn statements and ‘non-budget’ statements of the last few years we knew most of the details in advance. What we did find out today is that UK PLC is in a better position than feared. It is believed that inflation will fall to 2.9% by the end of 2023.
However, finding staff is a problem faced by most small businesses. This budget was the Chancellor's way of helping alleviate this shortage. He has done this by:
Whilst these will help, the question is whether they are going to provide the much-needed increase in people going back to work?
What was hoped was that the chancellor was going to stop the planned corporation tax rise from 19% to 25% for businesses earning between £50k and £250k in profits. Sadly, this tax rise and all its complications still take effect. These will prove very punitive if you run multiple businesses.
What there was in the budget were the following announcements which will help businesses:
What is full expensing?
In 2021, the government introduced the super-deduction to go further to encourage companies to invest. This was due to end on 31 March 2023. The government is now introducing full expensing, a 100% First Year Allowance, from 1 April 2023 until 31 March 2026.
For investments in qualifying plant and machinery such as IT equipment the cost of these are normally taken over a period of years. I.e. If a laptop cost £1000 and was seen to last 10 years, its cost would be taken over a 10 year period. I.e. £100 per year. Whereas with full expensing, the £1000 cost can be taken in the year it was incurred.
What do you need to do now?
Given the extra costs the government has now imposed on your small business AND the rising cost of energy bills AND the minimum wage increases AND the 10% inflation rate across 2023, you have work to do. Namely:
Of course, give us a call on 0121 667 3882 if you need help with any of these next steps. We are here to help.