The Spring Statement 2022 has arrived
In this year’s Spring Statement, the Chancellor faced immense pressure to act on living standards amid escalating energy costs, rising household bills and increased taxes. It provided an opportunity for the Chancellor to address these issues.
The Chancellor focused on three key areas: People, Capital and Ideas, and delivered the biggest net cut to personal taxes in over 25 years. The Chancellor was keen to encourage a new culture of innovation and enterprise.
Many thought it would be the perfect opportunity for the Conservatives to scrap the proposed 1.25% increase to Employees NIC and Dividends but instead, the biggest surprise concerning National Insurance was the uplifting of the Primary Threshold being lifted by £3,000 to £12,570. A benefit to employees of £330.
In a bid to support SMEs, the Chancellor announced a 50% business rates relief for eligible retail, hospitality and leisure properties. Employment Allowance will also increase by £1,000 to £5,000 from April 2022.
- Primary NIC threshold increases from £9,500 to £12,570 from July
- Primary and Secondary NIC threshold & Dividend rates increases of 1.25% is confirmed to come into effect from April 2022
- Employment Allowance increase from £4,000 to £5,000
- A 5p cut to fuel duty came into force at 18:00 on 23rd March 2022
- The basic rate of income tax will go from 20% to 19% by the end of Parliament in 2024 (2nd May 2024)
- OBR reports inflation peaked at 8.7% in Q4 with forecasted inflation to be 7.4% for 2022
- Bank of England raises interest rates to 0.75%
- 0% VAT on domestic renewable energy installations for the next 5 years
- A further £500m will be put into the Household Support Fund
- Investment of further £12 million in HMRC resources
Find more information on the Spring Statement here
If you have any questions about how the Spring Statement 2022 may impact you or your business, please do not hesitate to contact us.