A £27 billion transformation of capital allowances from April was announced by Chancellor Jeremy Hunt as he delivered a ‘Budget for growth’.
The Spring Budget followed an improved forecast from the Office for Budget Responsibility (OBR). The OBR said it expects the UK to avoid a technical recession this year, with a stronger-than-expected performance from the economy as inflation continues to fall.
The Chancellor announced that a £27 billion transformation of capital allowances from April this year will include ‘full expensing’ of investment on IT and plant and machinery for three years, plus an extension to the 50% first-year allowance in the same period.
There was also a £500 million package for research and development (R&D)-intensive businesses. In addition, Mr Hunt announced 12 investment zones across the UK, with funding for skills and support.
Reforms to childcare, which will see free care expanded for children over the age of nine months, were key to Mr Hunt’s plans to remove the barriers to work. A range of other measures were also announced to encourage parents, the disabled and the over-50s back into the workplace.
The Chancellor also made changes to the pension system to provide incentives for doctors and other highly-skilled workers to remain in the labour market.
As high energy costs continue to affect the UK, the Chancellor extended the Energy Support Guarantee (ESG) at £2,500 for another three months, while fuel duty was frozen once more.
Mr Hunt said:
‘Our plan is working – inflation falling, debt down and a growing economy.
‘Britain is on a lasting path to growth with a revolution in childcare support, the biggest ever employment package and the best investment incentives in Europe.’