Chancellor Rishi Sunak gave his Spring Statement on 23 March 2022. The chancellor referred to the on-going war in Ukraine and how he is considering the UK’s responses to that war and to our security in that respect and in the state of our economy. The chancellor confirmed that “We stand with Ukraine”, however actions to sanction Russia are not cost-free.
The chancellor expressed that underlying government debt is forecast to fall slightly in 2023 tax year, cost of borrowing is set to reach new highs and UK will pay £83billion in interest on government debt.
The chancellor described his new tax plan, principled approach to cutting taxes, continued discipline in spending and help for families on cost of living
Three immediate measures were announced:
- Fuel duty cut by 5 pence per litre until March 2023
- 0% rate VAT to apply to a wide range of energy saving products for households and for wind turbines etc, for the next five years. The reduced rate will not apply to taxpayers in Northern Ireland due to the post-Brexit agreement with the EU
- The household support fund will be doubled
Tax measures and updates for 2022/23 Tax Year:
- The levy for Health & Social care will apply from April 6, 2022: [this is the 1.25% increase in the rate of NICs and dividends from 6 April 2022, as announced last year]
- The employee NICs threshold for 2022-23 is increased by £3,000 to £12,570, equalising the NICs threshold with the Income Tax personal allowance, from July 2022.
- Employers NICs allowance will increase from £4,000 to £5,000 from 2022-23.
- There will be reforms R & D credits to ensure that they are given as planned and to expand R & D relievable areas to include data, cloud computing and pure maths.
- The capital allowances Super Deduction is set to end next year. The Autumn Budget 2022 will introduce new tax cuts for business.
- The capital allowances Annual Allowance will increase to £1,000,000.
- Business rates: a 50% discount will apply in 2022-23 to businesses in retail and leisure industries.
- Income tax: in 2024 there will be cut in the basic rate of income tax to 19%.
