Spring Budget 2023 – full expensing introduction

The Chancellor’s 2023 Spring Budget was focused on 'the four Es': Enterprise, Employment, Education, and Everywhere. The headline business measure was the introduction of full expensing for three years to encourage capital investment.

Other key measures included the abolition of the LTA charge, an increase in the Pensions Annual Allowance to £60,000, and the introduction of 30 hours of free childcare for children over 9 months, aimed at helping parents return to the workforce.

Full expensing for companies

The introduction of full expensing was the government's answer to the end of the super-deduction. It allows companies to write off the full cost of qualifying plant and machinery investments in the year they are made. This measure is designed to boost UK productivity by encouraging businesses to invest in new technology and equipment.

Pension reforms

The Budget contained significant surprises regarding pensions. The Lifetime Allowance (LTA) charge was abolished entirely, removing a major disincentive for high earners (particularly senior doctors) to continue working. Additionally, the Annual Allowance—the amount you can save into a pension each year tax-free—was increased from £40,000 to £60,000, offering substantial new tax planning opportunities.

Childcare support

To help parents return to work, the government announced a major expansion of free childcare. The scheme will eventually provide 30 hours of free childcare a week for working parents of children aged 9 months up to school age. This phased rollout will provide significant financial relief for families and is expected to boost overall employment levels.