On Wednesday (March 15th) the Chancellor, Jeremy Hunt, delivered his Spring Budget to the House of Commons.

With the press dubbing this the ‘Back to Work Budget’ in the days leading up to its delivery, Mr Hunt included plenty of measures aimed at tempting non-working, working-age people back into employment. This amounted to several incentives targeting those considering early retirement; support for disabled people and those temporarily out of work; and measures helping new and working parents (particularly those with children under the age of three).

Meanwhile, for businesses, there was the slightly less welcome introduction of a 6% rise in Corporation Tax for those with annual profits exceeding a quarter of a million pounds.

Here’s a quick summary of what the Chancellor unveiled and the impact it might have on you, your business, and your finances.


Corporation tax has been a particularly contentious issue in recent Budgets and fiscal statements. And, it was no different this time around, with CT increasing from 19% to 25%. This means that, from next month, any companies making profits north of £250,000 will pay a 25% tax on those profits. Any businesses with profits of between £50,000 and £250,000 will pay between 19% and 25%.

To appease affected businesses, the Chancellor did supplement his speech with a raft of capital allowances aimed at helping business leaders offset that sharp, and rather immediate, Corporation Tax rise.

So, in a somewhat compensatory measure for smaller businesses (following his scaling back of tax credits last year), SMEs will now be able to claim a £27 credit for every £100 they spend – so long as they spend 40% or more of their total expenditure on Research and Development.

The Annual Investment Allowance will also increase back to £1m. That means 99% of ALL businesses will be able to deduct the full value of their investments from that year’s taxable profits.

Furthermore, every penny a company invests in IT equipment, plant or machinery can be deducted in full from taxable profits too. There will also be higher tax relief for firms in the film, TV and video game industries.

In new, streamlined rules, international traders will see a reduction in the amount of paperwork they’re required to submit. They will also be given longer to enter customs forms as well. And, Mr Hunt also laid out plans to tackle any promoters of tax avoidance schemes.

As per the previous Budget, income tax bands remain frozen until 2028. So, certain pay rises could drag individuals into higher tax brackets or at the very least mean a greater proportion of their income is subjected to tax.

Income tax on annual earnings of over £12,570 is charged at 20%. This rises to 40% on earnings over £50,270 a year. The highest rate of income tax – currently 45% on earnings above £150,000 – will instead be paid on earnings of more than £125,140 from next month.

Remember also that, following on from last Autumn’s statement, there will also soon be significant changes affecting limited company directors who receive remuneration via company dividends.

Until now, directors and entrepreneurs have been earning up to £2,000 a year before paying any dividend-related taxes. Those paying the basic rate of tax then pay 8.75% on any dividends they draw from their company while higher-rate taxpayers pay 33.75% (those earning over £150,000 a year pay almost 40% in dividend tax).

However, from next month, the tax-free dividend allowance will drop from £2,000 to £1,000, halving again to £500 the following year.


The Chancellor confirmed that inflation was on track to fall by almost 3% by the end of this year, as well as bringing attention to the OBR’s latest forecast, which suggests that whilst the economy is expected to contract by 0.2%, the UK will not enter into a ‘technical recession’ – contrary to previous predictions.

The economy is expected to grow by 1.8% in 2024 and 2.5% the year after.

Mr Hunt also confirmed that the Energy Price Guarantee would remain at £2,500 for the next three months – saving the average family an additional £160. It was previously set to rise to £3,000 from the beginning of next month to limit the cost of the scheme to the government, but global energy prices appear to be reducing steadily.


The overarching theme of Mr Hunt’s employment-related pronouncements was perhaps most overtly epitomised by his own tagline… “those who can work, should”.

Moving forward, sanctions will be applied more rigorously to those who fail to meet strict work-search requirements, as well as those who choose not to take up ‘reasonable’ job offers. This includes those receiving Universal Credit without a health condition.

For those working fewer hours, the Administrative Earnings Threshold will rise from the equivalent of 15 hours to 18 hours at the National Living Wage.

A new fitness-to-work testing regime will be introduced, meaning people will have to qualify for health-related benefits. And, more places will be made available on ‘skills boot camps’ to encourage those over-50s who have left jobs to return to the workplace.

Elsewhere, a white paper is being published this week on disability benefits, including plans to abolish the ‘work capability assessment’, thus separating the benefits entitlement from an individual’s ability to work. The result, Mr Hunt claims, will mean disabled benefit claimants will be able to seek work without the threat of losing financial support. £400m in funding will also be allocated to increase the availability of mental health and musculoskeletal resources for workers.

Possibly the biggest announcement affecting some employees, though – albeit not one that directly targets the employment sector per se – was perhaps this Budget’s ‘flagship’ policy: from April 2024, 30 hours of free weekly childcare will be gradually extended to include all children between the age of nine months and three years.

This is a major shake-up, with childcare costs in the UK currently amongst the highest in the world. The new provision will apply to households where both parents work at least 16 hours a week, and only applies for 38 weeks a year (i.e. term time). Parents are eligible the moment their maternity/paternity leave ends and the Chancellor expects the measure to save an average of £6,500 a year for a family with a two-year-old child – a cost reduction of nearly 60%. As we said, though, this will not be immediate, with a staggered introduction up to the back end of 2025.

The government will also fund more ‘wraparound’ care for school-age children, too. Schools and local authorities will receive funding to increase the supply of wraparound care, allowing all parents of school-age children to drop their children off between 8am and 6pm daily. His ambition is to see all schools offering a wraparound service, either on their own or in partnership with another school/s, by September 2026.


After being frozen for nine years, the annual tax-free allowance on pensions will increase from £40,000 to £60,000 a year. Those already drawing a pension who want to save more will be able to put in an extra £10,000 a year (this is up from £4,000 currently).

Furthermore, the Lifetime Allowance – which was previously set at £1.07m – will be abolished.

Mr Hunt also promised to unveil measures to ‘unlock’ productive investments from pension funds, at the same time improving the ‘allure’ of London’s financial sector. This comes amidst concern amongst financiers and policymakers after a number of high-profile organisations opted to list on the NYSE over the LSE.

Other Announcements

  • 12 new lower-tax, investment zones will be formed across the country, including in Liverpool, Greater Manchester, South & West Yorkshire, the West & East Midlands, the North East and Teesside, as well as one each in Scotland, Wales and Northern Ireland. Each zone will receive £80m over a five-year period.
  • Immigration rules look set to be relaxed for some roles in the construction sector in a bid to ease labour shortages.
  • Referencing the country’s support for the war effort in Ukraine, the Chancellor confirmed an additional £11bn going into the UK defence budget over the next five years. This will eventually account for 2.25% of GDP by 2025.
  • The fuel duty rise has been scrapped and the existing 5-pence reduction will continue for a further year.
  • In a boost to publicans, from August, the duty on beer, wine and cider sold in pubs will be up to 11- pence lower than the supermarket equivalent.
  • Tax on tobacco is to increase by 2% over inflation (6% above inflation for hand-rolled tobacco).
  • There will also be up to £20bn worth of support to the development of carbon capture, usage and storage. This will support, so says the Chancellor, up to 50,000 jobs and capture 20-30 million tonnes of CO2 per year by the end of the decade.
  • Nuclear energy will also be deemed ‘environmentally sustainable’ for investment purposes.
  • As part of his ‘Plan for Quantum’, the Chancellor will invest £2.5bn in quantum computing in a bid to keep the UK competitive in this fast-moving, ever-changing technological field.
  • There will also be an annual £1m prize for the next decade, named the ‘Manchester Prize’, awarded to the person or team conducting the ‘most ground-breaking’ AI research that year.
  • And finally, there will be a £63m fund to support public leisure centres.
Blog written by
Sam Wright
Marketing Manager at

Sam Wright is Danbro’s Marketing Manager. He produces regular content and feature articles on our digital and non-digital channels – and social platforms – for the Danbro Group and its subsidiaries, as well as having responsibility for the Company’s internal and external communications.

His background is in Journalism and Creative Writing, having previously contributed to publications such as The Daily Post, The Lancashire Evening Post, and The Blackpool Gazette.

He is a keen swimmer and avid Manchester United fan (but don’t hold that against him), and he lives in Lancashire with his wife, Sarah.

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