“Our film and TV industry has become Europe’s largest, with our creative industries growing at twice the rate of the economy.” – Jeremy Hunt
Jeremy Hunt announced his Spring Budget on Wednesday, so we’ve condensed what we think you would find most helpful and relevant.
However, if you ever have a question or query, it’s best to reach out to our tax advisors and accountants directly!
Media and Music
The government are continuing to reform and enhance film, TV and video games tax reliefs. Expenditure credit rate will be 34% for film, high end TV and video games, and 39% for animation and children’s TV sectors. The qualifying threshold for high end television will remain at £1million per hour.
The government will also extend the temporary higher rates of tax relief for theatres, orchestras, and museums and galleries for two further years until April 2025.
Tax relief for expenditure on plant and machinery – “Full Expensing”
For Limited Companies only – From 1st April 2023 the 130% Super-Deduction is replaced by a new unrestricted First Year Allowance. This follows similar rules to the Super-Deduction, so is available at 100% or 50% on all brand-new qualifying assets. Qualifying assets include IT equipment, music equipment and other plant and machinery etc. but does not include Cars. Currently this will run until 31st March 2026 but the government plans to make it permanent.
Business Tax Overviews
Self-employed individuals continue to pay Class 2 and Class 4 National Insurance Contributions (NICs) if their profits exceed £12,570.
For 2023/24, Class 2 NICs are calculated at £3.45 per week and Class 4 NICs are calculated at 9% on profits between £12,570 and £50,270, and at 2% on profits over £50,270.
The government is also consulting on reforming the cash basis for the self-employed.
New rate from 1st April 2023, where corporation tax will increase to 25%. It will remain at 19% for those with profits up to £50,000, and marginal relief will apply for companies with profits between £50,000 – £250,000. For companies with profits of over £250,000 the full profits will be taxed at 25%.
Associated companies will share those thresholds – so if you have two businesses with a combined profit over £250,000, the 25% tax rate will apply.
Personal allowance and basic rates are frozen till 5th April 2028. That’s £12,570 for personal allowance, and £50,270 for basic rate. As earnings increase, individuals will move into higher tax bands.
The personal allowance continues to be withdrawn for higher earners, with £1 of personal allowance lost for every £2 of adjusted net income over £100,000.
Higher rate will remain at 40% for those earning £50,271 – £125,140, and 45% for those earning over £125,140.
The dividend allowance is also due to be reduced from £2,000 in 2022/23 to £1,000 in 2023/24 and then £500 in 2024/25.
Capital Gains Tax:
It was also confirmed that the £12,300 Annual Exempt Amount (AEA) will be reduced to £6,000 in 2023/24 and only £3,000 in 2024/25.
If you are planning any capital disposals – for example, selling property or art, or gifting assets to family – please contact us to discuss the best strategy.
One of the biggest changes announced is that the lifetime allowance will be abolished from the 6th April 2023. Meaning the pension cap of £1,073,100 will no longer be in place. The maximum tax-free withdrawal will remain at 25% with a maximum cap of £268,275.
One thing to note is that Labour have said that, if elected, they will re-introduce the lifetime allowance.
The Annual Allowance (AA) will be increased from £40,000 to £60,000 on the 6th April 2023, meaning you, and your employer, will be able to put £20,000 more into your pension pot before pension tax charges apply.
For those with an ‘adjusted income’ over £260,000 (up from £240,000) the AA is tapered, losing £1 of allowance for each £2 of income over the threshold. The minimum amount the allowance can be reduced to is increasing from £4,000 to £10,000.
The maximum contribution that can be made by someone who has already accessed their pension has also been increased from £4,000 to £10,000.
New business scheme to help with energy costs for businesses, charities and the public sector has been confirmed. The Business Energy Bills Discount Scheme will run continue until 31st March 2024, giving non-domestic customers discounts on their gas and electricity bills.
Lastly, for the small touring band, fuel duty will be frozen with the 5p cut in place, and the alcohol duty will remain frozen till August, with the duty on a draught pint looking at being 11p cheaper than the supermarkets. Just in time for the summer festivals?