Business Advice, Finance

Budget 2023: What to Expect and How Will it Affect Your Business?

Business Advice | 14 March 2023 | 1 year ago

Each year, the government sets out its financial plans in the form of a Spring Budget. This year’s budget will take place tomorrow, 15th March 2023, and it will be presented by Chancellor Jeremy Hunt. This usually happens around 12.30pm, directly after Prime Minister’s Questions. Below, we have taken a look at what you can expect from the budget, and how it could affect your business.

What is the Budget?

The budget is a statement made by the Chancellor to MPs, and it happens in the House of Commons. It sets out the government’s plans for the economy including, raising and lowering taxes, and changes to public spending. It also covers funding related to schools, health, energy and pensions.

What Can We Expect From This Year’s Budget?

Energy Price Guarantee – The Energy Price Guarantee is a way to protect customers from increasing energy costs, by putting an upper limit on how much suppliers can charge for energy. At the moment, this sets the cost of gas and electricity at around £2,500 per year for a typical household. It’s expected that the energy price guarantee will be kept at the current levels for the next three months, meaning serious increases for businesses should be avoided. It will be interesting to see what happens to the cost of energy, especially as the price of wholesale energy is falling, and whether energy costs will reduce as a result.

Childcare Costs – The cost of childcare is something that affects a lot of employees in the UK, but the budget is expected to put more money towards childcare funding. This is being done by raising the cap on Universal Credit claimants. This should help with managing the cost of childcare, as well as increasing the number of people who are eligible for childcare support.

Tax-Free Pension Allowance – Currently, the tax-free pension allowance is £1.07 million, but this is expected to rise to £1.8 million. This is being done to encourage workers to stay in employment for longer, and to build up their pension pots before retiring. This will give businesses a wider selection of potential employers to choose from, and will help with reducing employee turnover.

State Pension Age – The age in which you can start receiving your State Pension is expected to rise as part of the budget. By raising the State Pension age, it’s hoped that people over the age of 50 will be encouraged back into jobs, which could help businesses to tackle current work shortages.

Fuel Duty – With the increased cost of energy, a lot of businesses and individuals are struggling to afford petrol and diesel, but the budget is expected to freeze this. By freezing fuel duty, the cost of fuel shouldn’t increase much further.

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