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.
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