The big announcements from the spring statement

The big announcements from the spring statement

It’s been a tough start to 2022, it feels like we are finally seeing the back of Covid with all restrictions now gone. However, inflation is the highest it has been for quite some time, energy and fuel prices have increased and everything just feels a bit tighter financially. The war in Ukraine and the economic sanctions against Russia have also contributed and the Chancellor is looking to build a stronger UK economy.

With this in mind, the Chancellor Rishi Sunak announced a few key changes around National Insurance (NI), income tax and fuel duty.

The NI threshold level have increased (quite a bit) by £3,000 It will start from July and reflect the same level as income tax. Therefore, anyone earning less than £12,570 will no longer need to pay NI. However, there has already been a previous announcement that the NI contributions would be increasing by 1.25% in order to support an increase in spending on social and health care.

There has also been a drop in income tax from 20% to 19% which will begin in April 2024, this will impact anyone earning between £12,570 and £50,270.

Rising fuel costs have been difficult for everyone on the back of the increase in energy bills. The Chancellor has also announced a cut in fuel duty of 5 pence per litre in order to reduce this cost at the pumps this would take place immediately.

With the rise in NI to cover the health and social care only just freshly announced this had to stay in place but the increase in the threshold should soften the blow.

R&D Tax reliefs are being reformed from April 2023, the main changes are to block deductions for overseas R&D work. Further changes will be consulted in the summer which may see an increase in the relief in order to ensure the UK is continuing to support innovation.

Sean Daniel, Managing Director said “The cost of living is set to rise and this budget set about trying to ease some of the pressures. The R&D tax relief scheme is being reviewed later in the year and it will be interesting to see if this increases in order to encourage more development in this area.”

If you would like a chat about how any of the announcements in the spring statement, please get in touch with the friendly Clear Vision Financial Management team. You can call us on 01794 330025 or email us