Good news for some: 13 points from the Chancellors spring budget

Energy bills support

The Government’s Energy Price Guarantee, which subsidies household energy costs above a certain threshold, was previously scheduled to become less generous from April 1. 

This would have seen the amount that a typical household pays per year rise from £2,500 to £3,000.  Support will now continue at the same level. It will save the average family £160 on their energy bills and cost the Treasury around £3bn.

The so-called “prepayment premium” – where customers who use energy prepayment metres pay more than those on direct debit – would be scrapped from July. 

The move is expected to save about four million households £45 a year.

Pension lifetime allowance abolished

The Chancellor announced generous pension tax changes by abolishing the lifetime allowance – the maximum amount that workers can put into their pension pots before they are taxed – instead of simply raising the threshold, as had been predicted.

The lifetime allowance is currently just over £1m. In a nod to concerns that pension taxes have prompted many clinicians to quit early, Mr Hunt said the change meant 80pc of NHS doctors would no longer pay taxes on their pensions.

Pension Annual Allowance

The pensions annual tax-free allowance will rise by 50pc from £40,000 to £60,000. The money purchase allowance – the amount you can put in your pension once you have started taking money out of it – will rise from £4,000 to £10,000.

Corporation tax rise

There will be a rise in corporation tax effect from April. The change, first announced by then-chancellor Rishi Sunak in the 2021 Spring Budget, will see the tax rate climb from 19pc to 25pc. This is expected to pull in an extra £18bn per year for the Treasury.

The full force of the tax rise will hit businesses with profits of more than £250,000, while those with profits of between £50,000 and £250,000 get marginal relief. Those with profits of less than £50,000 will see no change – they will continue to pay corporation tax at 19pc. One in ten companies will pay the full 25pc rate.

Fuel rise

A planned rise in fuel duty this April has been delayed again. Hiking the levy in line with RPI inflation would have added 7p to the price of a litre of fuel, while a temporary 5p fuel duty cut was also due to expire. The two factors combined meant the cost of fuel duty was on course to rise by 23pc. The temporary cut would be extended by 12 months and the inflationary rise held back again. 

Investement zone

The Government will create 12 new “investment zones” across the UK. Hoping to create “12 new Canary Wharfs”. They will be led by partnerships between local authorities, universities, and businesses, aiming to galvanise innovation. 

Defence budget up

The UK’s defence budget will rise by £11bn over the next five years. The Government will also aim to increase defence spending to 2.5pc of GDP, up from the Nato minimum of 2pc, when economic and fiscal circumstances allow. A funding boost will also be handed to the Office of Veteran Affairs. 

New nuclear power body

The launch of Great British Nuclear, a new body that will help energy companies find suitable sites for nuclear power plants and develop crucial supply chains. GBN would be tasked with ensuring 25pc of Britain’s electricity comes from nuclear by 2050, as set out in last year’s energy security strategy. Meanwhile, the Government is to launch an open competition for small modular reactors (SMRs), where companies such as Rolls-Royce can put forward their technology as candidates to receive funding. It will finish by the end of the year. 

Prizes for AI researchers

To make the UK a leader in artificial intelligence (AI), it was announced that plans were being made to boost the country’s computing power and encourage innovation. The Chancellor has accepted recommendations from Sir Patrick Vallance, the chief scientific adviser, including a proposal to provide £900m towards developing a new cutting-edge supercomputer for the UK.

The Government will iron out issues around AI with the Intellectual Property Office and launch a new “AI sandbox” to help companies bring products to market more quickly. It has also published a new strategy to make the UK a leader in quantum computing which will see £2.5bn ploughed into research up to 2033. Meanwhile, Mr Hunt has created a new annual prize of £1m, which will be awarded every year – for the next 10 years – to AI researchers for the best innovations.

All under-fives to have 30 hours free childcare

30 hours of free childcare for all under-5s from the moment maternity care ends, in eligible households where all adults are working at least 16 hours, they will introduce 30 hours of free childcare not just for three- and four-year-olds, but for every single child over the age of nine months. The 30 hours offer will now start from the moment maternity or paternity leave ends. It’s a package worth on average £6,500 every year for a family with a two-year-old child using 35 hours of childcare every week and reduces their childcare costs by nearly 60pc. Because it is such a large reform, it will be introduced in stages to ensure there is enough supply in the market.

Working parents of two-year-olds will be able to access 15 hours of free care from April 2024, helping around half a million parents. From September 2024, that 15 hours will be extended to all children from 9 months up, meaning a total of nearly one million parents will be eligible. And from September 2025 every single working parent of under 5s will have access to 30 hours free childcare per week.

Chancellor freezes beer duty

The chancellor has frozen a planned rise in alcohol duty until August 1.  The government would “increase the generosity” of tax relief for draught beer from August 1. This means the tax paid on draught beer will be 11p lower than duty paid by supermarkets. This was part of a “Brexit pubs guarantee” and would not have been possible while Britain was in the EU. Due to the Windsor Framework, this will be extended to pubs in Northern Ireland, he said.

Chancellor rows back R&D tax credit cuts

A partial walk back on measures to slash R&D tax credits for small businesses. In the Autumn statement, Mr Hunt curtailed a scheme that allowed start-ups to claim back taxes from their research spending. The move led to fury from the tech sector amid concerns it would reduce investment. Now businesses in the most high tech sectors, that invest up to 40pc of their spending in R&D, will continue to receive an enhanced tax credit. The credit will be worth an extra £27 for every £100 spent.

Hunt outlines tax proposal for businesses

A three-year policy of “full expensing” for businesses will mean every pound a company invests in IT equipment, plant or machinery can be deducted “in full and immediately” from taxable profits.