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Budget 2023: Later Living & Care

Yesterday, Jeremy Hunt delivered his first official 'non-emergency' budget as chancellor. It was billed as a Budget for Growth, with a focus on the four 'E's: Employment, Education, Enterprise, and Everywhere - but does it deliver for Later Living & Care?

Well, if we are only looking at headline policy promises, the answer is simple. No. The budget did not contain  any new funding for health and social care - indeed the only mentions of either related to funding commitments set out in the Autumn Statement. 

There is also no mention of the long promised cross-department governmental taskforce on housing for older people (which has yet to meet), nor any firm commitment to implementing the recommendations of the Mayhew Review

There were, however, a number of policy announcements that will impact the sector. The most crucial of these are set out below: 

Corporation Tax

The double-blow of the hiked rate of corporation tax coinciding with the end of the super-deduction feared by UK businesses did not materialise. 

Moving away from the already promised increase in the rate of corporation tax to 25% from April 2023 proved to be a step too far for a Government already plagued by U-turns, but the blow was softened by the retention of the “super-deduction”. 

The super-deduction allows businesses to deduct the full cost of investments from their profits as soon as they spend the money, and is considered essential to encourage much-needed investment by businesses. 

Qualifying expenditure could include:

  • machines such as computers, or printers
  • office equipment such as desks and chairs
  • vehicles such as vans, 
  • patient handling equipment, such as hoists or lifts
  • some fixtures such as kitchen and bathroom fittings and fire alarm systems

The new £9 billion package will remain in force for three years, with a promise to make it more permanent as soon as it becomes responsible to do so.

Energy Costs

Whilst the budget did announce an extension to the government's domestic/ household energy support scheme - there was no equivalent announcement for businesses.  

Businesses will, however, still be eligible for the Energy Bill Discount Scheme announced in January, which will run from April 2023 to April 2024. 

Employment - attracting new workers

The Government proposals designed to help encourage people back into the work place could widen accessibility to the labour market and reduce some of the barriers to attracting staff into the care sector. In particular:

  1. Changes to and expansion of state-subsidised childcare, particular for parents receiving universal credit – This may help recruitment of staff into Care Homes to provide much needed care, if they have been unable to work due to cost of childcare.
  2. £400m plan to include availability of mental health and muscular skeletal resources and expand individual placement and support scheme – this may be beneficial for staff who have been struggling with back issues or stress related absences, making it easier for them to return to work and reducing levels of time out of the workplace
  3. Expansion of training programmes and 'returnerships' could help attract a new demographic of worker into the care sector

Occupational Health

The Budget contained a real focus on providing additional support and encouragement for the provision of occupation health services in the workplace - which could make it easier for smaller providers to gain access to occupational health services for staff - again reducing sickness or injury related absences. These measures included:

  1. An Occupational Health SME Subsidy Pilot – The government will expand a subsidy pilot scheme to support small and medium-sized businesses in England with the cost of purchasing occupational health services. 
  2. A consultation on increasing occupational health coverage – The government will consult on increasing occupational health provision by UK employers, including regulatory options, boosting the supply of occupational health professionals, and kitemarking to indicate the quality of occupational health provision; and 
  3. A consultation on occupational health tax incentives – The government will consult on options to increase investment in occupational health services by UK-wide employers through the tax system. 


Bar an announcement that construction workers were to be added to the Occupational Shortages list - which may make the development of new facilities a smidge less challenging - there was no real news on the immigration front. 

This is probably not a surprise, given that a far-reaching rules change was announced earlier this month. You can read more about these changes here.

Our employment team is running a webinar on business immigration challenges and how to tackle them on Wednesday 29 March - the sign up sheet can be accessed here, if you would like to take part. 

Personal Tax Changes 

There were also a raft of personal tax changes in the budget that may well impact on residents and potential purchasers looking to move into specialist accommodation for the elderly. 

In particular: 

  • Inheritance Tax (IHT): The stealth tax regime is designed to increase the tax take without increasing the rates of personal tax. IHT is due to raise more than a third more, in the five years to 2027, so that many estates will simply pay more tax by doing nothing. The freezing of the Nil Rate Band (NRB) at £325K goes on for a further five years, making it 19 years without an increase; the residence nil rate band (RNRB) for homes left to descendants is also frozen at £175K for seven years until 2028, along with the threshold over which you start to lose the RNRB, kept at £2million. This means the marginal tax rate on capital over £2m, effectively 60%, affects more and more estates - something which residents or prospective residents may be even more mindful of moving forward. 
  • Residential Property: The previous increase to SDLT thresholds announced in Autumn 2022 - which increases the amount buyers can pay for residential property before being liable to pay SDLT - was originally billed as a "permanent" change but then became a limited window that closes on 31 March 2025. This may impact on the timing of decisions about property purchases. 
  • Pensions: The Chancellor’s speech contained a huge surprise for the Pensions Industry, amazing many pensions professionals: instead of the anticipated increase in the Lifetime Allowance to £1.8 million it was abolished entirely. The additional and expected 50% increase in the Annual Allowance from £40,000 to £60,000 wasn’t a shock. Buried in the Costing Document is a statement that the cap on tax free cash will be set at 25% of the current Lifetime Allowance of £1.073 million. So from April 2023 onwards, the maximum amount of tax free cash available on retirement will be £268,275.00. Abolishing the Lifetime Allowance is expected to cost the Treasury £135million in the 2023-24 tax year, rising to £835million in 2027-28.

2.29 The government is investing record levels of funding in response to the pressures facing our vital health and social care services. Autumn Statement 2022 made available up to £8 billion of additional funding for the NHS and adult social care in England in 2024-25, with an additional £3.3 billion in each of 2023-24 and 2024-25 to support the NHS in England and up to £2.8 billion in 2023-24 and £4.7 billion in 2024-25 to support adult social care and discharge.

2.30 This investment is enabling rapid action to improve urgent and emergency care, as set out in the recent recovery plan, and primary care, with further details to be published shortly. This is in addition to planned spending of more than £8 billion across 2022-23 to 2024-25, as confirmed at Spending Review 2021, to tackle the elective backlog.”