Spring Statement 2022

In this blog post, we look at the 2022 Spring Statement announcement delivered in the House of Commons by Rishi Sunak on 23rd March. The Chancellor certainly pulled some unexpected rabbits out of his hat.  Read on for further details.

The Chancellor saved his biggest and most surprising announcement until the end of his speech, with the news that the rate of Income Tax will fall from 20% to 19% in 2024. This will be the first cut in the rate of Income Tax in 16 years.

From July 2022, the National Insurance threshold will rise to £12,570.  This increase aligns the NI threshold to the current Income Tax threshold, meaning that people can earn £12,570 before paying Income Tax or NI.  Unfortunately, the planned rise in NI rates by 1.25 percentage points from April 2022 will remain.

The Employment Allowance will rise from £4,000 to £5,000 in April 2022. This is good news for many small employers, as it means that the first £5,000 of Employers NIC in the 2022-23 payroll year will not have to be paid to HMRC.

A welcome announcement for motorists, was the news that fuel duty will be cut by 5p a litre.  This change came into effect from 6pm on 23rd March 2022 and will remain in place until March 2023.

Homeowners who install energy efficiency materials such as solar panels, heat pumps, or insulation, will be rewarded with a VAT reduction on these items from 5% to zero for five years.

All in all, the Spring Statement proved to contain a few unexpected surprises. Who knows what the Chancellor will have in store for the Budget announcement later this year?