Spring Budget 2023 Summary | Ember

Spring budget 2023: What the Chancellor’s budget means for businesses

March 15, 2023
Spring 2023 is officially here, and with it comes the latest announcements from the Chancellor of the Exchequer, Jeremy Hunt.But what exactly are the key changes taking place that are due to affect business owners? We’ll break down the important points of the 2023 Spring Budget, and what they mean for business owners.


Corporation Tax

One of the main changes taking place under the budget is the increase in Corporation Tax for business owners earning above £50,000.As of 1st April 2023, businesses with taxable profits above £250,000 will pay Corporation Tax at a main rate of 25%, while those with profits below the small profits threshold of £50,000 will still be taxed at 19%.
Limited companies earning between these benchmarks will be taxed at 25%, but the amount they owe will be reduced by Marginal Relief. For more on working out what your Corporation Tax bill looks like, head over to our guide on calculating Corporation Tax.

Small profits rate (companies with profits under £50,000)19%N/A
Main rate (companies with profits over £250,00025%N/A>
Main rate (all profits except ring fence profits)N/A19%
Marginal Relief lower limit£50,000N/A>
Marginal Relief upper limit£250,000N/A>
Standard fraction3/200N/A
Special rate for unit trusts and open-ended investment companies20%20%
Source: GOV.UK

Capital allowances

If you’re worried about having to pay more in Corporation Tax, the government have announced a policy of full expensing that promotes the notion that “relief upfront is better than relief later.

As a result, until April 2026, for ever £1 invested in qualifying plant and machinery, companies can save up to 25p on their tax bill.

First-year allowances

Until 31st March 2026, companies investing in qualifying plant and machinery will qualify for a 100% first-year allowance for main rate assets, fully expensing costs in the year an investment is made. This offers the same relief as the super deduction tax relief, which was initially due to end April 2023.Companies investing in special rate assets will also benefit from a 50% first-year allowance.However, expenditure on plant or machinery for leasing will no longer be considered as a qualifying asset due to concerns about the rule’s wide scope for error.


One of the main aims of the government is to keep more people in the workforce for longer, with changes to how pensions are taxed under review.Having been frozen for the past 9 years, the tax-free yearly allowance for pension pots is to rise from £40,000 to £60,000. As a result, you can put away an extra £20,000 before being subject to tax.The Chancellor has also scrapped the lifetime allowance — currently set at £1,070,000 — on tax-free pension contributions, which determine how much can be saved over a lifetime before having to pay extra tax.

Research & Development

Initially announced in the Autumn Statement 2022, the Chancellor confirmed that as of 1st April 2023, the rate of Research & Development Expenditure Credit (RDEC) is set to increase from 13% to 20% — the highest uncapped headline rate in the G7.From 1st April 2023, an increased rate of relief for loss-making R&D intensive small businesses will be introduced. Eligible companies with qualifying R&D expenditure being worth more then 40% of total business expenditure are set to receive £27 for every £100 of R&D investment under this proposal.