Pensions

No changes were announced to the main rules on tax relief for pension schemes and pension contributions. The reduction of the basic rate of income tax affects people who pay contributions to personal pension schemes where the scheme provider claims a credit for basic rate tax on the contribution: at a basic rate of 20%, a contribution of £800 is topped up by the government with £200 to make £1,000, but this falls to £188 and £988 with a 19% tax rate. The government has announced a one-year transitional period that will allow pension schemes to claim at 20% in 2023/24.

Venture capital schemes

The Seed Enterprise Investment Scheme (SEIS) gives investors income tax and capital gains tax reliefs on investments in shares of new start-up companies. To enable more companies to use SEIS, the limit on investment raised will be increased by two-thirds to £250,000 from April 2023. The gross asset limit for the company will be increased to £350,000, the age limit will rise from 2 to 3 years, and the annual investor limit will double to £200,000. The government estimates that 2,000 companies a year use the scheme and will potentially benefit from these changes.

The Chancellor announced that the government remains supportive of the Enterprise Investment Scheme and Venture Capital Trusts and ‘sees the value of extending them in the future’, but no details were given.