Spring Budget: Other Announcements
Alcohol and cigarette duty
From August, a new system for calculating taxes on alcohol will come into force, meaning duty rates will increase in line with the Retail Price Index. In a promise to cherish post-Brexit British pubs, however, draught relief will increase to 9.2% for draught beer and cider and to 23% for wine, spirits-based and other fermented draught products.
The Chancellor said this will mean a draught pint will be 11p cheaper than if bought in a supermarket.
When it comes to cigarettes, from 15 March 2023 duty rates on all tobacco products will increase by RPI +2%, hand-rolling tobacco will increase by RPI +6% and the minimum excise tax will increase by RPI +3% this year.
Fuel duty
Fuel duties will be maintained at current levels for an additional 12 months, cancelling the planned increase in line with inflation for 2023/24.
The Government will spend over £5bn maintaining fuel duty at current levels for the next 12 months, including keeping the 5p cut in place.
The rates will stay “in the long term under review, including carefully considering support for motorists, fiscal implications and use of fuels”, the Treasury wrote.
Tax simplification
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.
Meanwhile, the Government will consult on expanding the cash basis, which is a simplified way for sole traders to calculate and pay their income tax.
It will also work to support better digital communication with taxpayers and deliver IT systems that enable tax agents to payroll benefits-in-kind on behalf of employers.
Energy subsidy and security
Affirming that an enterprise economy “needs cheap reliable energy”, Hunt announced an extension to the climate change agreement scheme for two years to allow eligible businesses £600m of tax relief on energy efficiency measures.
He also allocated up to £20bn for early deployment of carbon capture, usage and storage (CCUS) – “paving the way for CCUS everywhere across the UK as we approach 2050”. A shortlist of projects can enter a selection process later this year.
AI competition
One of Hunt’s main goals for the country’s future is an investment in advancements of groundbreaking artificial intelligence (AI) technologies.
The Government plans to award a £1m prize every year for the next 10 years to researchers that drive progress in critical areas of AI.
Charity support
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.