Posted 24th March 2022
The Chancellor announced a number of measures aimed at boosting the economy and helping those hardest hit by the rising cost of living.
Whilst he continued with his earlier pledge to raise the rate of National Insurance (NI) contributions and dividends by 1.25% percentage points to help with social care reforms, he countered some of its impact by raising the threshold at which NI becomes payable. From July 2022 the starting level of income at which NI contributions become payable will increase to £12,570.
Mr Sunak also pledged that the basic rate of income tax will be cut by 1p in the pound before the end of parliament in 2024. By then the Chancellor said the Office for Budget Responsibility (OBR) expects inflation to be back under control, with debt falling substantially.
Fuel duty was also reduced by 5p per litre for both petrol and diesel, which came into effect yesterday at 6 p.m. He said the reduction is the largest ever on all fuel duty rates.
A £1,000 increase to the Employment Allowance will benefit SME’s, while there will be no business rates due on a range of green technology used to decarbonise buildings.
In addition, the Chancellor announced 50% business rates relief for eligible retail, hospitality and leisure properties from April 2022.
In his Spring Statement speech, Mr Sunak said: ‘This statement puts billions back into the pockets of people across the UK and delivers the biggest net cut to personal taxes in over a quarter of a century.’
Please get in touch if you need more information about how the changes will affect you.