Spring Statement 2022 Tax Highlights

Here are the tax highlights of the Spring Statement announced by the Chancellor Rishi Sunak on 23 March 2022. For a full report, sign up for our monthly newsletters here.

Spring Statement

National insurance threshold increased by £3k

From July 2022, the primary threshold at which employees and the self-employed start paying national insurance will increase to £12,570. This is the same level as the income tax personal allowance (tax free) of £12,570. It sounds like the secondary threshold, at which employers start paying national insurance will remain at the planned level of £9,100 for 2022/23.

Fuel duty cut 5p per litre

From 6pm on 23 March 2022 until March 2023, fuel duty cut by 5p per litre, saving an average of about £3 per tank of car fuel.

Employment Allowance up by £1,000

Most employers will not need to pay the first £5,000 (was £4,000) of employer’s national insurance. The employment allowance doesn’t apply to companies where the only employee is a director.

Income tax cut by 1% by 2024

By the next election (due 2024), the basic rate of income tax reduced from 20% to 19%. However, there was no mention of the higher rates and dividends rates.

VAT removed on energy saving materials

Energy saving materials such as solar panels will have a VAT rate of 0% (was 20%).

Other measures announced

Household support fund doubled to £1bn

Reform and extension of Research and Development tax relief

Small business rates discounts of 50% for the retail, hospitality and leisure sectors

More details

For more details, read the actual Spring Statement here and the Tax Plan here. Or sign up for our monthly newsletter to receive an emailed report here.