On 15th March 2023 the Chancellor Jeremy Hunt delivered his first budget, with key announcements around childcare and pensions.
His budget had been designed to address the immediate concerns around the cost of living, as well as planning for future growth and investment.
Childcare
The Chancellor announced that 30 hours of free childcare for every child over the age of nine months with working parents would be available by September 2025. This is being phased in with 15 hours of free childcare for working parents of two-year-olds coming into effect in April 2024. With 15 hours of free childcare for working parents of children aged nine months to three years, being introduced by September 2024.
There will also be funding for schools and local authorities to help tackle barriers of availability of working parents for children of school age.
Pensions
Also announced was an increase in the pension tax-free annual allowance from £40k to£60k to incentivize highly skilled workers to stay in work. This was followed by the abolishment of the lifetime allowance charge (previously stood at around £1m per individual)
Apprenticeships for over 50s
In an effort to attract “older workers” back into the labor market, new types of apprenticeships for over 50s are set to be launched. These will help refine existing skills programs to make them more accessible to older workers. The chancellor said this will focus on “flexibility and previous experience to reduced training length” giving support to find a “recognizable path” back into work.
Universal Support scheme to help disabled into work
A new voluntary employment scheme for disabled people and those with health conditions called ‘Universal Support’ will be funded in England and Wales. The aim is to support those with disabilities and long-term sickness back into work, with up to £4k per person being invested to help find suitable roles to cater their needs for 50k people per year. This alongside a reform to the welfare system which would support claimants back into work without fear of losing their financial support.
More support for occupational health to keep people in work
Under the employment pillar for growth, the chancellor has revealed a £406m plan to tackle health issues keeping people of work with focus around mental health, musculoskeletal conditions and cardiovascular disease. Acknowledging ‘occupational health’ provided by employers, the chancellor has planned to bring forward two new consultations on how to improve instant availability for the support, and double funding for SMEs.
Raise corporation tax to incentivize investment
In line with mini budget the in September 2022, the chancellor has confirmed that the rise in corporation tax from 19 to 25 per cent will go ahead as planned. This is for companies with profits more than £250k and is predicted that less than 10% of UK businesses would pay the full 25 per cent rate. This increase is to incentivize investment to effectively compete with other EU markets.
A new “fully expensing” scheme is also to be enrolled, to allow every pound spent on IT equipment and machinery to be deducted in full from taxable profits.
