March 2023 budget: how you’re affected
FWD’s Chief Executive James Bielby shares the latest announcements from the Chancellor to see how this year’s spring budget will affect the wholesale sector
Alcohol and tobacco
Alcohol duties, as previously announced, will be frozen until August 2023.
From 1 August 2023:
- Alcohol duties will rise in line with RPI.
- The draught duty relief of 5% which is applicable to products sold in kegs over 20L, has been extended to 9.2%.
- As a result there will be an 11p difference in packaged vs kegged products.
Duty rates on all tobacco products will increase by RPI + 2%. The rate on hand-rolling tobacco will increase by RPI + 6% and the minimum excise tax will increase by RPI +3% this year. These changes will take effect from 6pm on 15 March 2023.
“The duty cut for draught product is welcome,” said James Bielby, FWD Chief Executive. “But the broader alcohol stealth tax introduced by the Chancellor will harm the convenience sector, ultimately raise the price of a pint in pubs and serve to deepen inflation and the cost of living crisis.”
Fuel and energy and transport
Fuel Duty frozen for another 12 months which avoids an 11p increase.
Climate Change Agreement Scheme – £600m tax relief on energy efficiency measures (e.g. solar panel installation) extended.
There were no changes to the business energy support package. As previously announced, the Energy Bills Discount Scheme will provide all eligible businesses and other non-domestic energy users across the UK with a discount on high energy bills until 31 March 2024, following the end of the current Energy Bill Relief Scheme. It will also provide businesses in sectors with particularly high levels of energy use and trade intensity with a higher level of support.
The government will uprate VED rates for cars, vans and motorcycles in line with RPI from 1 April 2023. To support the haulage sector, VED for HGVs will remain frozen for 2023-24.
Following consultation in 2022, the government will introduce a new reformed HGV levy from August 2023 following the planned end of the current levy suspension period. The reforms to the HGV levy are a further step towards reflecting the environmental performance of the vehicle. The government remains committed to ensuring that the levy applies to all HGVs using the UK road network.
Bielby said: “The extension of the 5% fuel duty cut is a welcome move. This will save wholesalers significant sums against the challenging backdrop of high fuel prices owing to the Ukraine conflict.
“The level of energy support provided to businesses especially in the hospitality sector is insufficient and it is disappointing that this hasn’t been addressed within this budget. We hope the government will work to support pubs and restaurants through this period of high inflation and economic challenge.”
Business taxes and investment allowances
Corporation tax will rise from 19% to 25% as planned.
The Super Deduction which had been in place for 2 years, will be replaced by a full capital allowance scheme for the next 3 years which will eventually be made permanent. Every pound invested can be deducted in full against taxable profits. This is worth the equivalent of £9bn as a corporation tax cut.
For smaller businesses, the government has increased the Annual Investment Allowance to £1m, meaning 99% of all businesses can deduct the full value of all their investment from that year’s taxable profits. This is to say that every single pound a company invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profits.
Bielby’s response: “We welcome the introduction of a full capital expensing scheme which will create a financial incentive for our members to invest in plant machinery, renewables and scale up operations.”
Returnerships will be introduced targeted at the over-50s, focusing on flexibility and previous experience to reduce training length. They will be supported by a £63.2 million investment for an additional 8,000 Skills Bootcamps in 2024-25 in England and 40,000 new Sector-Based Work Academy Programme placements across 2023-24 and 2024-25 in England and Scotland.
A White Paper will be published on disability welfare reform, abolishing the work capability assesment and separating benefit entitlement from the ability to work.
A new programme called Universal Support will help disabled people find employment with £4,000 worth of support per individual.
A £400 million plan to increase employment support for those with mental health and musculoskeletal problems will be introduced.
Two new consultations will be published seeking to improve occupational health.
An increase in the pensions lifetime allowance from £1.07 million to £1.8 million, benefiting up to two million people.
An increase in annual tax-free pension allowance from £40,000 to £60,000
Bielby said: “The Chancellor has failed out to outline how the major challenges of labour shortages plaguing the economy will be addressed. We welcome the introduction of returnerships and increased skills bootcamp funding, but these are medium term solutions and a short-term response should be introduced to support the economy in the here and now.”
Deposit Return Scheme
The government will legislate to simplify the VAT treatment of deposits charged under a deposit return scheme for drinks containers. This will ensure that, where a deposit is charged on a drink that is within the scope of a deposit return scheme and the container is returned for recycling, VAT will not be applied to the deposit amount. Where the container is not returned for recycling, HMRC will collect the VAT on the unredeemed deposit.Alcohol budget Deposit Return Scheme employment energy fuel FWD Government James Bielby tax tobacco transport