Chancellor Rishi Sunak has today unveiled the contents of his Spring Statement in the House of Commons. Read below the key announcements around the cost of living, employment allowance, VAT relief, income tax and more.
Cost of living
- Temporary cut to fuel duties – the Government will cut the duty on fuel and diesel by 5p per litre for 12 months, taking effect from 18:00 on 23 March 2022
- Household Support Fund – the Government is providing an additional £500 million to the Household Support Fund from April, which is distributed by local authorities in England
Increasing National Insurance thresholds
- The Government is raising the National Insurance Primary Threshold from £9,880 to £12,570 from July 2022
- Employers’ NICs will not be affected by this change
Increase in the Employment Allowance
- The Employment Allowance will be raised in April 2022, allowing eligible firms to reduce their employer NICs by up to £5,000 per year
Reducing NIC payments for self-employed low earners
- From April, self-employed individuals with profits between the Small Profits Threshold and Lower Profits Limit will not pay Class 2 NICsVAT relief for energy-saving materials
VAT relief for energy-saving materials
- VAT relief will now be applied to wind and water turbines, and eligibility conditions for energy-saving materials will be removed. A time-limited zero rate for the installation of energy-saving materials will also be introduced
Green reliefs for business rates
- The Government is bringing forward planned business rate exemptions for eligible plant and machinery used in onsite renewable energy generation
- The exemptions will now take effect from April 2022, a year earlier than previously planned
- Businesses will also be able to apply for a 100% relief for eligible low-carbon heat networks with their own rates bill
Basic rate of income tax
- The Government has committed to reducing the basic rate of income tax from 20% to 19% by April 2024
R&D tax relief reforms
- From April 2023, all cloud computing costs associated with R&D, including storage, will qualify for relief
Future reforms to business investment
- The Government wants to make changes to encourage greater business investment once the ‘super deduction’ scheme ends in April 2023. These focus on changes to capital allowances, including raising the Annual Investment Allowance. More information can be found on pages 36 to 38 of the Spring Statement 2022
- Government will work with businesses and other stakeholders between now and the Budget in the autumn, to assess the best options to take forward
Reforms to the apprenticeship levy
- The Government is looking making improvements to the way that apprenticeship levy funds can be spent, including looking at how more flexible apprenticeships can be supported
The full Spring Statement can be viewed here