Chancellor Rishi Sunak has delivered his Spring Statement against a backdrop of rising fuel, energy and food costs.
We’ve summarised the headline announcements below:
- Income tax is to be cut for the first time in 16 years – from 20% to 19% – by the end of Parliament in 2024
- Fuel duty is to be cut by 5p a litre from 6pm today (23 March 2022) until March 2023
- The National Insurance (NI) threshold will be raised by £3,000 to £12,570 – a £330 a year tax cut for approximately 30m people
- The retail, hospitality and leisure industries will see a 50% discount in business rates up to £110,000
Other notable points included the Chancellor’s intent to explore ideas around education and training, increasing capital investment and boosting innovation, as well as there being no delay in the NI increase through the new Health and Social Care Levy in April.
Past Budget/Spring Statement impact
Whilst this Spring Statement may be considered by some to be underwhelming, tax changes announced in previous Budgets/Spring Statement have started to take effect. For instance, HMRC’s takings from Capital Gains Tax (CGT) has risen dramatically in recent years, with the latest total almost double the £8.1bn collected five years ago and more than treble the £4bn collected a decade ago.
This is partly due to the 2020 Budget, which lowered the lifetime limit for Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) from £10m to £1m. This has cost some business owners millions in extra tax when they sell their stakes and has seen the UK’s CGT bill jump 35%, from £10.8bn to a record £14.6bn in the previous tax year to this one.
Get in touch
Aside from the 1p cut in the basic income tax rate, and bringing forward the hike in the NI threshold, significant tax adjustments failed to surface in this Spring Statement.
However, if you have any tax-related matters you would like answered, get in touch with our tax team on 01788 539000 or 0116 261 0061, or email us at [email protected].
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