We are delighted to have put together our summary of the key announcements from the Spring Statement along with previous announcements that effect the upcoming tax year.
The Spring Statement is normally an opportunity for the Chancellor to outline budgetary spends and forecasts, rather than a time when we expect to see any significant tax changes being made. However, this statement felt more akin to a mini budget given the growing pressure being put on businesses and individuals with the rising cost of living.
The headline grabbing item was the large increase to the National Insurance threshold for employees from July 2022. This will bring the threshold from when an employee pays NI in line with the personal income tax allowance of £12,570 – an estimated full year saving of up to around £350. A welcome additional saving but does come following the previous announcement of an additional 1.25% being payable on NI during the tax year 2022/23 which will then become a separate, Social Care Levy, from April 2023.
Support has been given to employer’s through the increase of the employer NI allowance, which will increase from £4,000 to £5,000 for eligible employers from April 2022 – an estimated 495,000 business benefiting. Although the employee NI threshold has increased, the employer NI threshold is remaining at the previously announced level. It will be subject to the additional 1.25%, which will take the rate of Employer NI to 15.05%.
With rising fuel prices, a cut to fuel duty of 5p per will be a welcome reduction but proof will be in the pudding to see whether this is felt at the pump the next time you fill your car.
More details can be found in the document linked below.
The challenges for business owners will continue through 2022, so measuring the impact of these changes will be key to ensure that you can plan for and mitigate the impact. If you are unsure, then do reach out to the team here at RiverView Portfolio.
