15th March 2023
Davenham’s overview of The Spring Statement 2023
In his first Spring Budget Statement announced on Wednesday 15th March 2023, the Chancellor, Jeremy Hunt promised to deliver on three of the five key priorities set out by the Prime Minister Rishi Sunak in January: to halve inflation, grow the economy and get debt falling. Here’s Davenham’s summary of the key points from the Budget in relation to the Asset Finance industry.
Fuel Duty cut frozen
In response to fuel prices reaching their highest ever levels last year, a temporary 12-month cut to duty on petrol and diesel of 5p per litre was announced in 2022 - the government will spend over £5 billion maintaining fuel duty at current levels for the next 12 months, including keeping the 5p cut in place. This represents £10 billion of support over 2 years, worth around £200 for the average car driver.
Becoming more energy efficient
The government has made a commitment to invest £20 billion over next twenty years on low-carbon energy projects, with a focus on carbon capture and storage.
To further leverage private investment into the UK’s secure and clean energy future, the government is launching Great British Nuclear (GBN) to address constraints in the nuclear market and support new nuclear builds as the government works towards net zero.
Although the initial focus of GBN will be on Small Modular Reactors, further large Gigawatt-scale projects will also be considered subject to value for money, relevant approvals and technology readiness and maturity, to help deliver net zero. Nuclear energy is to be classed as environmentally sustainable for investment purposes, with government promises of more public funding, and will also be included in the green taxonomy, subject to consultation, encouraging private investment.
The government is also providing additional funding for local projects to encourage growth and support communities, including: over £200 million for 16 high quality regeneration projects, £200 million for local authorities to repair potholes and improve roads, over £100 million of support for local charities and community organisations, and £63 million to help leisure centres with rising swimming pool heating costs, and invest to become more energy efficient.
Supporting the international trade, medical and AI sectors
A streamlined approvals process has been promised for new medical products and £900 million will be available for new supercomputer facility, to help the UK's AI industry. There will be reduced paperwork for international traders, who will also be given longer to submit customs forms under streamlined rules.
Tax rises and tax breaks
It was confirmed that the main rate of corporation tax paid by businesses on annual taxable profits over £250,000, will increase from 19% to 25% from April 2023 as previously announced.
Companies with annual taxable profits between £50,000 and £250,000 will pay between 19% and 25%.
Tax breaks and other benefits for 12 new Investment Zones across the UK, will be funded by £80 million each over the next five years.
Super Deduction out but 100% investment deduction in
The previously announced Super Deduction tax rate allowing every £1 a company invested into new, unused and qualifying plant and machinery assets from 1st April 2021 to have their taxes cut by up to 25p, will come to an end on 31st March 2023.
However, with the government still aiming to create an enterprise-focused economy by attracting and supporting the most dynamic and productive companies, the 2023 Spring Budget Statement announced a new measure which goes further than the Super Deduction, by introducing full expensing for 3 years from 1st April 2023. During this period, companies across the UK will be able to write off the full cost of qualifying plant, machinery and technology investment in the year they invest, supporting businesses to lower their taxable profits invest and to grow.
If you would like to discuss any of the points above from the 2023 Spring Statement in relation to Asset Finance, please call one of our knowledgeable team on 0161 832 8484 or you can email enquiries@davenham.co.uk. We can offer UK businesses alternative finance support by releasing funds from new or existing assets with affordable repayment plans.
Fuel Duty cut frozen
In response to fuel prices reaching their highest ever levels last year, a temporary 12-month cut to duty on petrol and diesel of 5p per litre was announced in 2022 - the government will spend over £5 billion maintaining fuel duty at current levels for the next 12 months, including keeping the 5p cut in place. This represents £10 billion of support over 2 years, worth around £200 for the average car driver.
Becoming more energy efficient
The government has made a commitment to invest £20 billion over next twenty years on low-carbon energy projects, with a focus on carbon capture and storage.
To further leverage private investment into the UK’s secure and clean energy future, the government is launching Great British Nuclear (GBN) to address constraints in the nuclear market and support new nuclear builds as the government works towards net zero.
Although the initial focus of GBN will be on Small Modular Reactors, further large Gigawatt-scale projects will also be considered subject to value for money, relevant approvals and technology readiness and maturity, to help deliver net zero. Nuclear energy is to be classed as environmentally sustainable for investment purposes, with government promises of more public funding, and will also be included in the green taxonomy, subject to consultation, encouraging private investment.
The government is also providing additional funding for local projects to encourage growth and support communities, including: over £200 million for 16 high quality regeneration projects, £200 million for local authorities to repair potholes and improve roads, over £100 million of support for local charities and community organisations, and £63 million to help leisure centres with rising swimming pool heating costs, and invest to become more energy efficient.
Supporting the international trade, medical and AI sectors
A streamlined approvals process has been promised for new medical products and £900 million will be available for new supercomputer facility, to help the UK's AI industry. There will be reduced paperwork for international traders, who will also be given longer to submit customs forms under streamlined rules.
Tax rises and tax breaks
It was confirmed that the main rate of corporation tax paid by businesses on annual taxable profits over £250,000, will increase from 19% to 25% from April 2023 as previously announced.
Companies with annual taxable profits between £50,000 and £250,000 will pay between 19% and 25%.
Tax breaks and other benefits for 12 new Investment Zones across the UK, will be funded by £80 million each over the next five years.
Super Deduction out but 100% investment deduction in
The previously announced Super Deduction tax rate allowing every £1 a company invested into new, unused and qualifying plant and machinery assets from 1st April 2021 to have their taxes cut by up to 25p, will come to an end on 31st March 2023.
However, with the government still aiming to create an enterprise-focused economy by attracting and supporting the most dynamic and productive companies, the 2023 Spring Budget Statement announced a new measure which goes further than the Super Deduction, by introducing full expensing for 3 years from 1st April 2023. During this period, companies across the UK will be able to write off the full cost of qualifying plant, machinery and technology investment in the year they invest, supporting businesses to lower their taxable profits invest and to grow.
If you would like to discuss any of the points above from the 2023 Spring Statement in relation to Asset Finance, please call one of our knowledgeable team on 0161 832 8484 or you can email enquiries@davenham.co.uk. We can offer UK businesses alternative finance support by releasing funds from new or existing assets with affordable repayment plans.