The Chancellor, Rishi Sunak, gave his Spring Statement in the House of Commons yesterday, 23 March 2022 and, in summary, the major key issues are:
- Employees will not start paying National Insurance contributions until they earn £12,570 which is in alignment with the personal tax allowance where income tax starts to be paid. This come into effect from 6 July 2022 and is worth £330 per year.
- Rishi Sunak also announced that the Employment Allowance for small businesses will increase from £5,000 per annum with effect from 6 April 2022. Employers need to meet certain criteria to claim this allowance and these can be checked here: https://www.gov.uk/claim-employment-allowance
- VAT will be scrapped on energy-efficient measures such as solar panels, heat pumps and insulation, which will be installed over the next 5 years. They will be taken out of the scope of VAT rather than zero-rated and this could see tax savings for a family having a solar panel installed of £1,000.
- Fuel duty was cut by 5p per litre with immediate effect and this will be until March 2023.
There are more National Insurance changes due in the next financial year from 6 April 2023 but there will be more updates nearer the time.
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