Spring Statement 2022

Chancellor announces tax cuts

With cost of living prices rising 6.2% in the 12 months to February 2022 chancellor Rishi Sunak delivered a Spring Statement this month unveiling a new Tax Plan to ease the financial challenges many families face, and to deliver cuts to personal taxes.

Spring Statement Key Points:

• Cut of 5p per litre in fuel duty for petrol and diesel on all fuel duty rates, which applies from 6pm on 23 March 2022.

• Starting thresholds for national insurance contributions (NICs) will rise to £12,570 from 6 July 2022.

• For the self-employed, where profits exceed £11,908 per annum, they will pay 10.25% on the profits up to £50,270 and 3.25% on profits over that upper profits limit.

• Temporary increase in NICs rates payable for employees from April 2022. Delivered as ‘transitional provision’ in readiness for the introduction of the Health and Social Care Levy from April 2023.

• Basic rate of income tax will be cut by 1p in the pound in April 2024.

• £1,000 increase to Employment Allowance from April 22 to benefit around half a million SMEs.

• No business rates due on a range of green technology used to decarbonise buildings

• 50% business rates relief for eligible retail, hospitality, and leisure properties.

• Homeowners installing energy efficiency materials such as solar panels, heat pumps, or insulation will see VAT cut on these items from 5% to zero for five years

• Local authorities will get a further £500m for the Household Support Fund from April, to help vulnerable households with rising living costs.

In his Spring Statement speech, the Chancellor said:

'Cutting taxes means people have immediate help with the rising cost of living, businesses have better conditions to invest and grow tomorrow, and people keep more of what they earn for years to come.'

Source: GOV.UK