March 2023 UK Government Budget Update: Key Takeaways for Accountants and SMEs
The UK Government unveiled its latest budget update in March 2023, with several key announcements impacting accountants, small and medium-sized enterprises (SMEs), and the economy at large. In this blog post, we’ll delve into the key takeaways from the 2023 UK Budget and explore how these changes may impact your accounting practice or business. Corporation…
The UK Government unveiled its latest budget update in March 2023, with several key announcements impacting accountants, small and medium-sized enterprises (SMEs), and the economy at large. In this blog post, we’ll delve into the key takeaways from the 2023 UK Budget and explore how these changes may impact your accounting practice or business.
Corporation Tax Rates and Thresholds
One of the major announcements in the March 2023 UK Government Budget was the adjustment to Corporation Tax rates and thresholds. The new rates are designed to support SMEs by reducing their tax burden, allowing for increased investment and growth. The main rate of Corporation Tax remains at 19%, but the new thresholds offer relief for smaller businesses.
Key takeaway for accountants: Stay updated on the new Corporation Tax thresholds to ensure your clients are aware of their potential savings and compliance requirements.
The UK Government has decided to maintain the current standard VAT rate of 20% and the reduced rate of 5%. However, it has introduced some sector-specific adjustments to the VAT rates applicable to certain goods and services. These changes are aimed at supporting industries impacted by recent economic challenges.
Key takeaway for accountants: Ensure you’re up to date with the latest VAT changes to advise your clients accurately and help them navigate the evolving tax landscape.
R&D Tax Credit Reforms
The government has announced a series of reforms to the Research and Development (R&D) tax credit scheme in an effort to further incentivise innovation and investment in R&D. These reforms include increasing the rate of the R&D tax credit and simplifying the claim process to make it more accessible for SMEs.
Key takeaway for accountants: Familiarise yourself with the new R&D tax credit rules and help your clients capitalise on these incentives to drive innovation and growth.
Support for SMEs
The 2023 UK Budget has a strong focus on supporting SMEs, particularly in the areas of investment, digital transformation, and access to finance. Initiatives such as the new Small Business Digital Fund and an extension of the Recovery Loan Scheme will play a crucial role in boosting business growth and resilience.
Key takeaway for accountants: Stay informed about these initiatives and proactively advise your clients on how they can take advantage of the available support.
As part of the UK Government’s ongoing commitment to a greener economy, the March 2023 Budget introduced a range of environmental incentives. These include tax breaks for businesses investing in energy-efficient equipment and electric vehicles, as well as a new Sustainable Investment Tax Relief to encourage green investment.
Key takeaway for accountants: Understand the environmental incentives on offer and help your clients identify opportunities to benefit from these tax breaks while promoting sustainability.
The March 2023 UK Government Budget update presents numerous opportunities and challenges for accountants and SMEs. By staying informed and adapting to these changes, accounting professionals can provide valuable guidance to clients and help them thrive in an ever-changing economic landscape. Nomi‘s cloud-based accounting and payroll software is here to support accountants in navigating these changes and ensuring compliance. Sign up for a free trial today and experience the benefits of an all-in-one accounting solution.