How does the Budget affect Northern Ireland businesses?
The Chancellor, Jeremy Hunt, delivered his Budget statement on Wednesday 15 March 2023. We have summarised the key points from the Spring Budget and specific issues affecting Northern Ireland businesses.
-0.2% in 2022-23
1.8% in 2023-24
2.5% in 2024-25
2.1% in 2025-26
1.9% in 2026-27
5.1% of GDP in 2022-23
3.2% of GDP in 2023-24
2.8% of GDP in 2024-25
2.2% of GDP in 2025-26
1.7% of GDP in 2026-27
88.9% of GDP in 2022-23
92.4% of GDP in 2023-24
93.7% of GDP in 2024-25
94.6% of GDP in 2025-26
94.8% of GDP in 2026-27
Northern Ireland-specific announcements
An additional £130 million will be provided to the Northern Ireland Executive through the Barnett formula over 2023-24 and 2024-25.
The government is launching the refocused Investment Zones programme as part of Leveling Up. This will identify 12 high-potential knowledge-intensive growth clusters across the UK including one in Northern Ireland. The final design choices and agreement on the Investment Zone in Northern Ireland will be subject to the restoration of the Northern Ireland Executive.
The government has allocated up to £40 million to widen participation in further and higher education in Northern Ireland.
The government will also provide up to £3 million to extend the Tackling Paramilitarism Programme.
Duty rates of all alcoholic products produced in, or imported into, the UK will increase in line with the retail price index (RPI).
Draught Relief will increase from 5% to 9.2% for beer and cider draught products and from 20% to 23% for wine, spirits-based, and other fermented draught products. These changes will take effect from 1 August 2023.
The government will legislate to make changes to the duty structure for alcoholic products, creating standardised tax bands based on alcohol by volume. The government will also introduce two new reliefs and transitional arrangements for certain wine products. These changes will take effect from 1 August 2023. HMRC will also take forward plans to harmonise the approval, return, and payment processes for domestic producers of alcoholic products. These changes are scheduled to take effect from late 2024 with the introduction of the new digital system.
See alcohol duties.
The government is maintaining the rates of fuel duty at the current levels for an additional 12 months, including keeping the 5p cut in place.
The Gross Gaming Yield bandings for gaming duty will be frozen from 1 April 2023.
There will be an increase in duty on hand-rolling tobacco by an additional 4% and the minimum excise tax by an additional 1%.
Vehicle Excise Duty (VED)
The government will uprate VED rates for cars, vans, and motorcycles in line with RPI from 1 April 2023. To support the haulage sector, VED for HGVs will remain frozen for 2023-24.
The headline rate of Corporation Tax will increase from 19% to 25%, as planned, from 1 April 2023.
A new policy is to be introduced to enable firms to benefit from 100% tax relief for the next three years on IT equipment, plant, or machinery investments.
Enhanced credit is to be introduced for qualifying small and medium-sized enterprises that spend 40% or more of their total expenditure on research & development (R&D).
Audio-visual tax reliefs
The new Audio-Visual Expenditure Credit will replace the current film, high-end TV, animation, and children’s TV tax reliefs. Film and high-end TV will be eligible for a credit rate of 34% and animation and children’s TV will be eligible for a rate of 39%. The expenditure threshold for high-end TV will remain at £1 million per hour
The government will uprate Landfill Tax rates in line with RPI, from 1 April 2024. It was announced at Autumn Budget 2021 that Landfill Tax rates from 1 April 2023 would be uprated in line with RPI. Landfill Tax applies in England and Northern Ireland.
The Aggregates Levy rate is frozen for 2023-24. The government will increase the Aggregates Levy rate in line with RPI from 1 April 2024.
R&D tax relief
From1 April 2023, a higher rate of relief for loss-making R&D intensive SMEs will be introduced. SME companies for which qualifying R&D expenditure constitutes at least 40% of total expenditure will be able to claim a higher payable credit rate of 14.5% for qualifying R&D expenditure.
Energy Price Guarantee
It was announced that the Energy Price Guarantee (EPG) cap will remain at £2,500 for a further three months until 1 July 2023, when it will increase to £3,000. For further details see, how the EPG will be applied to energy bills in Northern Ireland.
The government will adjust the EPG from 1 July 2023 to bring charges for comparable direct debit and pre-pay meter (PPM) customers into line until April 2024, when the EPG ends. This measure will apply across the UK. As the energy market operates differently in Northern Ireland, this measure will apply here only where a structural PPM premium exists.
Energy Bills Discount Scheme
The Energy Bills Discount Scheme will provide all eligible businesses and other non-domestic energy users across the UK with a discount on high energy bills until 31 March 2024, following the end of the current Energy Bill Relief Scheme. It will also provide businesses in sectors with particularly high levels of energy use and trade intensity with a higher level of support.
Subject to consultation, nuclear power will be classed as environmentally sustainable to give the same investment incentives as renewable energy. The first competition for Small Modular Reactors will be launched and completed by the end of the year.
The government will consult on increasing occupational health provision by UK employers, including regulatory options, boosting the supply of occupational health professionals, and kitemarking to indicate the quality of occupational health provision.
The government will also consult on options to increase investment in occupational health services by UKwide employers through the tax system.
The pensions annual tax-free allowances will be increased by 50% from £40,000 to £60,000. The Lifetime Allowance limit of £1 million will be abolished.
There were a number of measures announced to help with childcare, however, these will only apply in England.
Artificial intelligence (AI)
The government will launch an AI sandbox to trial new, faster approaches to help innovators get cutting-edge products to market
The government will award a £1 million prize every year for the next 10 years to researchers that drive progress in critical areas of AI.
Work with the Intellectual Property Office will be accelerated to provide clarity on IP rules so Generative AI companies can access the material they need.
Read full details on the Spring Budget 2023