Spring Budget 2022
The Chancellor delivered his Spring Statement on Wednesday 23 March 2022.
National Insurance Contributions
- 1.25% increase to go ahead from April 2022 for employees, employers, self-employed. The funds raised are to be used for health and social care.
- Offset by increase to £12,570 in the level at which employees and self-employed start to pay NIC from July 2022. This aligns the point at which an individual starts to pay NICs with the personal allowance for income tax.
- This cut will more than offset the effect of the 1.25% increase for most taxpayers with earnings up to £34,000.
- No change has been made to the level at which employers NICs are paid. For 2022/23 this is £9,100 for most employees.
- However, the Employment Allowance will increase from £4,000 to £5,000, allowing eligible businesses to reduce their employer NIC cost.
- Personal allowance is unchanged at £12,570
- Basic rate band (20%) is unchanged from £12,571 – £50,270
- Higher rate band (40%) is unchanged £50,271 – £150,000
- Additional rate (45%) above £150,000 (unchanged)
- Gradual loss of personal allowance between £100,000 – £125,140 (unchanged)
- The Chancellor has proposed a cut in the basic rate of income tax from 20% to 19% in April 2024. This is likely to fall shortly before the next General Election.
- Fuel Duty has been cut by 5p per litre for 12 months from 23 March 2022
- The Household Support Fund will be doubled to £1 billion from April 2022. This Fund helps households with the cost of essentials such as food, clothing and utilities.
- Green Technology will be exempt from business rates in England from April 2022.
- VAT on Energy Saving Materials installed in residential accommodation in Great Britain will be reduced to 0% from April 2022.
- The reduced VAT rate of 12.5% for the Leisure and Hospitality Sector will revert to 20% from April 2022.
- Research and Development schemes to be enhanced from April 2023. Reform is expected to boost sectors such as AI (artificial intelligence), robotics, design and manufacturing.
Contact Don Fisher for more information.