Budget 2023: The top changes to business taxation

The corporation tax increase - announced in 2021's Spring Budget - to 25% for businesses with profits over £250,000 remains in place. This will come into effect as planned from 1st April 2023.

Expensing

Hunt announced full expensing for eligible businesses for 3 years from 2023, replacing the 'super-deduction' announced in 2021 which expires at the end of March. During this 3-year period, companies across the UK will be able to write off the full cost of qualifying plant and machinery investment in the year they invest. Companies investing in special rate (including long life) assets will also benefit from a 50% first-year allowance during this period.

Research & development

Further support for R&D intensive SMEs was announced - from 1st April, the rate of the Research & Development Expenditure Credit (RDEC) will increase from 13% to 20%. Additionally, an enhanced rate of tax relief for loss-making companies was announced, with eligible companies recieving £27 for every £100 of R&D investment.

Investment Zones

Hunt announced a 'refocused' Investment Zones programme, with 12 locations across the UK designed to grow key sectors such as green industries, digital technologies and life sciencies. These areas will benefit from Stamp Duty relief, enhanced tax allowances, and access to grant funding to improve local infrastructure.

The full Spring Budget stated:

"The government is creating the right conditions for Enterprise in all sectors across the economy, based on competitive taxes, access to capital and smarter regulation. By supporting entrepreneurs and attracting the most productive companies to set up, invest and grow in the UK, stronger growth can be delivered in future industries. Spring Budget delivers a range of enterprise boosting measures, such as tax incentives and smarter regulation, that taken together will support future growth for the long-term."