Key Points in the Chancellor’s Spring Statement
Cautioning that the economy and public finances will likely worsen “potentially significantly” and having regard to the still unknown costs effects of the war in Ukraine, the Chancellor, Rishi Sunak announced the following key points in his Spring Statement: –
NATIONAL INSURANCE – An increase in the National Insurance Threshold by £3,000 (rather than £300 as planned) to line up with the Personal Allowance figure of £12,570 from July 2022. – This marks a tax cut for employees of £330 a year benefiting 30 million people.
FUEL DUTY – to be cut by 5p per litre from 1800 hrs on 23rd March 2022 until March 2023
EMPLOYMENT ALLOWANCE – set to increase from £4,000 to £5,000 from April 2022 which is worth £1,000 to small business with employees where the employer NI liability exceeds £5,000.
BUSINESS RATES – Smaller Business Rates to be discounted by 50% for businesses in retail, hospitality and leisure.
ENERGY SAVING INSTALLATIONS – Homeowners who have energy saving measures such as heat pumps, solar panels and insulation installed in their homes in the next 5 years will pay 0% VAT on installation costs. The savings on household energy bills are expected to be over £300 per year.
LOCAL COUNCIL FUNDING – increased funding to local councils to provide targeted support to “vulnerable households”
INCOME TAX RATES -The basic rate of income tax remains unchanged but will be reduced from 20p to 19p in the pound before the end of the Parliamentary session in 2024.
Having regard to the handouts given by the Exchequer during the Covid pandemic, the opportunity for greater support to counter the effects of growing inflation were perhaps restricted but the above measures will no doubt be welcome in most quarters.
David Hodgson, MBE
Read Milburn & Co
Chartered Accountants
