Spring Budget Statement March 2022
As you are no doubt aware, Rishi Sunak made the spring Statement yesterday, a summary is below and the full report can be accessed on our website by clicking on this link Budget Summary Report
- Fuel costs: a temporary cut in fuel duty from Wednesday 23rd March of 5p per litre. This will save about £3 per week off of an average family car tank of fuel according to RAC.
- The national insurance threshold for employees and the self employed will rise to £12,570 from July , and be in line with the personal allowance. For many employees this will largely offset the rise in the rate of national insurance, which increases from 12% to 13.25% for 22/23. We will update director clients if their payroll needs to change in light of these announcements.
- The employment allowance rises from £4,000 to £5,000 per year from 6 April 2022, this will mitigate the rise in employer national insurance for the smallest employers, the Employer’s NI rate rises from 13.80% to 15.05% in 2022/23.
- Energy saving solar panels and heat pumps will see a drop of VAT rate from 5% to 0% for 5 years.
- Inflation could reach 7.4% for this year, and is currently 6.2%
- A pledge to cut basic rate tax from 20p to 19p by the end of the parliament in 2024.
- The minimum wage/national living wage will increase to £9.50 from April 2022.
- Dividend rates will rise by 1.25% in line with the NI increases from April 2022.
- Benefits and state pension are to rise 3.1% in April, well below inflation.