Spring Statement 2022

The Chancellor laid out a ‘Tax Plan’ which he claimed represents the biggest net cut in personal taxes in over a quarter of a century.

• Tax cuts on income to help families with the cost of living
• Boosting growth and productivity with measures to be announced in the 2022 Budget
• Measures to let people keep more of what they earn, including a cut in the basic rate of tax from 20% to 19% in 2024

The economy is expected to grow by 3.8% this year, while inflation is expected to rise to 7.4%. Inflation which has been low for many years, is driving the cost of living upwards.

Here are some of the headlines from the Statement:

Personal

Fuel duty will be cut by 5p per litre until March 2023.

The income threshold at which point people start paying employees’ National Insurance will rise to £12,570 in July, which Mr Sunak said was a tax cut for employees worth over £330 a year. However, this is offset by the pre-announced rise in National Insurance Contributions. The Class 4 NIC threshold for the self employed will also be adjusted to be in line with the employees’ revised National Insurance threshold.

Mr Sunak pledged to cut basic rate of income tax from 20p to 19p in the pound before the end of this Parliament.

Business

The Employment Allowance, which gives relief to smaller businesses’ National Insurance payments, will increase from £4,000 to £5,000 from April 2022.

R&D tax relief is going to be reviewed over the summer and changes announced in the Autumn Budget 2022; indicators are that there may be a shift of the relief towards larger businesses with a proven track record of commercialising their R&D. We will keep all our clients informed on this important tax relief.

Of course, if you have any further questions or want to know more, then please do not hesitate to get in contact with us.

Martin , Sandra and the Team at Adams Moore