The Chancellor of the Exchequer Jeremy Hunt has announced the Spring Budget 2023 date. For business owners, considering the timing of any prospective transactions could be vital for minimising the associated tax liabilities.

When is the Spring Budget 2023?

The Spring Budget 2023 will be presented on 15th March 2023, along with a full financial forecast from the Office for Budgetary Responsibility.

What policies could be affected?

A number of measures were announced in November’s Autumn Statement – we have summarised the most relevant changes below.

While it is impossible to know for certain what will be announced in the Spring Budget, there is ongoing speculation within the tax industry that further changes could be made to Capital Gains Tax (CGT).

There is particular concern around a possible increase in the headline rates of CGT, considered by many to be particularly generous at 10% and 20% for basic and higher rate taxpayers respectively. It would not require much effort for the Government to increase these, with the pre-2016 rates of 18% and 28% considered the most likely alternatives.

In addition, many are concerned about a potential abolition of Business Asset Disposal Relief (formerly Entrepreneurs’ Relief), despite the fact it was already curtailed significantly in March 2020. The Business Asset Disposal Relief currently provides claimants with a reduced CGT rate of just 10% on the first £1 million of qualifying gains.

Confirmed tax changes for April 2023

The following changes have already been announced in the Autumn Statement and will come into force from April 2023:

Policy Change When change will take effect
Corporation Tax Increasing from 19% to 25% 1st April 2023
Capital Gains Tax Reducing the tax-free allowance for CGT from £12,300 to £6,000 1st April 2023 (further reduction planned for 2024)
Dividend allowance Decreasing from £2,000 to £1,000 1st April 2023 (further decrease planned for 2024)
Income tax – additional rate Lowering the additional rate threshold from £150,000 to £125,140 6th April 2023

Read our publication on the Autumn Statement 2022 for full details of the tax changes listed above.

Transaction timing is key

Whilst we cannot see into the future to confirm exactly what the 15th March may bring, we can help you plan for the worst-case scenario by ‘locking in’ the current rates of tax.

The right timing is essential when it comes to maximising returns from a transaction. If you have found yourself considering your options recently, it would be beneficial to speak to a transactional tax specialist now.

For specialist guidance on transaction timing and wider tax advisory support, contact us today to speak to a member of our Partner-led transactional tax team.