Spring Statement 2022
The Spring Statement was delivered today by the Chancellor of the Exchequer, Rishi Sunak, which, “delivers the biggest net cut to personal taxes in over a quarter of a century.”
Headline announcements include:
- The National Insurance threshold will be raised by £3,000, meaning people must earn £12,750 per year before paying income tax or NI. This tax cut, which is worth over £6 billion, will benefit 30 million people and a typical employee is expected to save over £330 per year.
- From April 2022, self-employed individuals with profits between the Small Profits Threshold (SPT) and the Lower Profit Limit will not pay Class 2 NICs, while allowing individuals to be able to continue to build NI credits
- Sunak announced the first cut to the basic rate of income tax in 16 years – from 20% to 19% by the end of Parliament in 2024.
- Fuel duty will be cut by 5p a litre with immediate effect.
- VAT will be scrapped on home energy-saving measures such as insulation, solar panels and heat pumps.
- Retail, hospitality and leisure sectors will have a 50% discount in business rates up to a limit of £110,000.
- The Household Support Fund for local councils to help the most vulnerable will be doubled to £1bn from April.
Three big predicted figures
Sunak also referred to estimates from the Office for Budget Responsibility on inflation, growth and debt repayments. They say that inflation and higher taxes from April could mean households face the biggest fall in living standards ever.
- Inflation forecast to average 7.4% this year
- UK growth expectation downgraded to 3.8% this year
- UK to spend £83bn on debt interest in the next year
A qualified employment law solicitor and our managing director, Angela has unparalleled legal expertise and decades of experience and knowledge to draw from. She’s a passionate speaker and writer that loves to keep employers updated with upcoming changes to legislation, and is a regular guest speaker on BBC Leicester Radio.