The Chancellors Spring Statement

Fuel Duty Cut

Fuel duty on petrol and diesel has been cut by 5p per litre for 12 months and takes effect from 6pm on 23rd March 2022.

Increase in Employment Allowance

Eligible businesses will be able to reduce their employer National Insurance contributions bills as the Employment Allowance will increase from £4,000 to £5,000

NIC Rate to Increase

Mr Sunak did not abolish his plans to increase the NIC contribution rate. From April 20022, employers, employee's and the self-employed will all pay 1.25p more in the pound for their NI contributions until April 2023. However...

...The National Insurance Threshold is Raised

From July 2022 the annual National Insurance Threshold will increase from £9,880 to £12,570 for both employee's and the self-employed (Class 1 and Class 4 NIC).

For an employee this could give savings of over £330 a year. For the self-employed savings will typically be over £250 per year...plus there are changes on the class 2 NIC on profits that will benefit about half a million self-employed people by up to £165 per year. A self-employed person will still be entitled to access entitlement to contributory benefits such as state pension, maternity allowance and employment & support allowance.

Basic Rate Income Tax Cut

...but NOT YET. The UK Government will cut the basic rate of income tax by 1% from April 2024 from 20% to 19%.

R&D Tax Credits Reform

For those businesses that are able to benefit from R&D tax credits from April 2023 they will be able to claim relief on the storage of their vital data and pure maths research. The Government will also be releasing draft legislation this summer in an attempt to improve the R&D incentives.

Some other highlights:

• Mr Sunak is hoping for greater business investment as there will potentially be a series of policy changes to the UK's existing capital allowances regime to encourage business investment to drive forward productivity and growth. The Government will engage with business organisations and other interested parties from now until the autumn so that the changes can be considered ahead of April 2023
• Abolishing VAT on energy saving insulation by reducing the VAT rate to 0% for the next 5 years. This is great for a homeowner if you are thinking about installing solar panels, heat pumps or insulation.
• The UK economy, originally forecasted to grow by 6% has been amended to 3.8% this year.
• However, inflation was 6.2% in February and is likely to average 7.4% for the rest of this year.
• Local authorities will get another £500m for the Household Support Fund from April. The total fund is now £1bn...however, the OBR did forecast that household energy bills will rise by a whopping 40% again in October!!
• Want some bed time reading - you can find the full report here https://www.gov.uk/government/...