In yesterday’s Spring Statement, the Chancellor announced a cut in fuel tax, a change to the National Insurance threshold, and a cut in Income Tax in 2024. The planned 1.25% increase in National Insurance will go ahead in April to raise cash for health and social care.
The Spring Statement is usually only intended to be an economic update, but with inflation hitting a 30 year high, the Chancellor was under pressure to deliver something similar to a mini-budget.
Key announcements include:
- Cutting fuel by 5p per litre until March 2023.
- Raising the National Insurance Threshold by £3,000 to £12,570 from July 2022.
- Announcing a 1% cut in Income Tax to 19% from April 2024.
- Increasing Employment Allowance by £1,000 to £5,000 per year from April 2022.
- Abolishing VAT on energy saving insulation, heat pumps and solar panels.
- R&D tax credit reform to be announced in the Autumn 2022 Budget, so that they will be effective and better value for money.
- The temporary £1 million level of the Annual Investment Allowance to be extended to 31st March 2023.