Blog: Spring Statement 2023: Enterprise
Enterprise is one of Jeremy Hunt’s four priority pillars of sustainable growth from the Spring Statement 2023 speech. An enterprise-focused economy is one that attracts and supports the most dynamic and productive companies.
We’ve covered the 6 key takeaways for UK businesses in a separate article and here are the key Enterprise announcements:
Research and Development
On top of the R&D Tax Credit Scheme changes outlined in the Autumn 2022 statement, the Chancellor announced further R&D tax relief support for R&D intense, loss-making SMEs. This will affect approximately 20,000 SMEs in the UK – coming into effect from 1 April 2023 and worth around £500 million per year.
All confirmed R&D changes from 1 April 2023:
- The Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20%.
- The small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86%.
- The SME credit rate will decrease from 14.5% to 10%.
- If a company is loss-making and considered R&D intense, it will be eligible to claim £27 from HMRC for every £100 of R&D investment. A company is considered R&D intensive where its qualifying R&D expenditure is worth 40% or more of its total expenditure.
- There will be now a delay to restrictions on overseas expenditure in R&D tax relief claims. The previously announced restriction on some overseas expenditures will now come into effect from 1 April 2024 instead of 1 April 2023. This will allow the government to consider the interaction between this restriction and the design of a potential merged R&D relief.
Capital allowances: Full expensing
From 1 April 2023 until 31 March 2026, companies across the country will be able to claim back 100% of their qualifying costs. For the next three years, the Government says 99% of companies will be able to immediately reclaim every pound invested.
The Community Investment Tax Relief (CITR) expansion
The amount Community Development Finance Institutions (CDFIs) can lend to eligible businesses will rise from m £100,000 to £250,000 for profit organisations.
Also announced in the Spring Statement 2023 enterprise focus, the government is supporting investment in the energy system by launching Great British Nuclear to support new nuclear builds, making up to £20 billion available for Carbon Capture.
Creative industry expenditure
Creative industries across the UK will receive continued Government support through reformed tax reliefs and expenditure credits. Expenditure for high-end TV production will remain at £1m per hour. The Government will also extend the higher rates of theatre, orchestra, and museums and galleries tax reliefs for two further years.
The Government is providing over £100m of support for charities and community organisations in England for those most at risk due to increased demand from vulnerable groups and high delivery costs.
The Government will collaborate with businesses and representative bodies to review tax guidance for small businesses over the next two years to help them interact with the tax system. Guidance will be “clear, simple and easy to find, introduce step-by-step interactive guidance and modernise HMRC forms to improve the customer experience”, the Treasury wrote.