16/03/2023

What does the spring budget mean for Northern Ireland businesses?

Members reading the Spring Budget  may sometimes find it difficult to discern what parts apply in Northern Ireland and what parts are for Great Britain (or in some cases England) only.

Some good news is Office for Budget Responsibility (OBR) now predict inflation will decrease from 10.4% to 2.9%. The Chancellor attributed high inflation as causing the current levels of strike action across UK; no doubt the high inflation has not helped.

Other good news is that the economy will now avoid a technical recission.

We have set out our summary digest below:

• Under the Barnett Formula (mechanism to automatically adjust public expenditure allocated to NI to reflect public spending in England) Northern Ireland Executive will receive a further £130 million

 

• Corporation Tax will still increase from 19% to 25%, as planned, from 1 April 2023.

 

• Fuel Duty will be frozen for an additional 12 months, which may help some businesses encourage those to come back into the workplace.

 

• However, from 1 April 2023 other forms of Tax Relief will be available with on IT equipment, plant, or machinery investments the cost which can be deducted from taxable profits over the next three years.

 

• The Chancellor announced the development of 12 new Investment Zones with one planned for Northern Ireland. The government will work with the devolved authorities on this proposal.

 

• Energy Price Guarantee (EPG) cap will continue for another 3 moths £2,500 until July 2023.

 

• A big disappointment for Northern Ireland (as we already lag behind Great Britain on childcare funding) is that the Headliner of ‘30 hours a week free childcare for parents of children from 9 months to 4 years” will not apply in Northern Ireland. Unlike the rest of Great Britain there is no free childcare scheme here Childcare Strategy so needed here.?

 

• Returnerships targeted at the over-50s, plans to refine existing skills programmes to make them more accessible to older workers, giving them the skills and support they need to find a recognisable path back into work.

 

• In Pensions the Lifetime Allowance Charge will be abolished and the Annual Allowance will be increased from £40k to £60k.

 

• Occupational Health Pilot Subsidy Scheme for small and medium-sized businesses will be expanded.