On tax…Caroline Colliston, Partner leading DWF's tax practice in Scotland, said:
"With an election on the foreseeable horizon, today's Budget appeared to be hoping to fill a lot more than pot holes and pension pots. The reality is that many of the announcements appear to be there to fill or at least paper over the BREXIT and prior budget black holes.
"With a key focus on making the UK a greater employed and productive nation, incentives are being offered to ensure more people 'return to work' from returnships to childcare support. Businesses are being encouraged to spend (and expense), research and develop, invest and employ at the same time as facing a hike in corporation tax from April. In addition, investment zones are to be created across the UK and business rates look set for further devolved responsibility in the West Midlands and the Manchester Combined Authorities."
On back to work plans…Joanne Frew, Global Head of Employment and Pensions, said:
"The latest ONS statistics show that the estimated number of job vacancies fell by 51,000 between December 2022 and February 2023, with economic pressure resulting in a cautious approach to recruitment. However, overall the number of vacancies remains high increasing the pressure on the government to encourage people who have dropped out of the working population to return to the job market. It is unsurprising against this backdrop that the Chancellor's budget has announced a drive on drawing people back into the workforce.
"With the spiralling cost of living, childcare has become another outgoing which many working families simply cannot afford to pay. According to the government 435,000 people in England with a child under 3 are inactive due to their caring responsibilities. In light of this and in response to the labour supply shortage the government is expanding the support on offer by providing 30 hours a week of free childcare for 38 weeks a year for eligible working parents of children aged 9 months to 3 years. As statistically women are more likely to take responsibility for childcare than men, this offer of support should encourage more women back into the workforce creating a more diverse workplace.
"The largest numbers to leave the labour market during the pandemic were the over-50s which caused a real skills shortage across the UK labour market. The budget has announced plans to encourage these workers back into the workforce with tax reliefs on pensions, the abolishment of the Lifetime Allowance charge and the increase of the Annual Allowance to £60,000. Employers have faced an incredibly challenging period from the pandemic to the difficult economic climate – a workforce encompassing experienced, highly skilled talent is essential.
"Attraction and retention of talent has remained problematic for employers throughout the economic crisis. Encouraging skilled workers back into the workforce is certainly a step in the right direction."