The Chancellor made his annual Spring Statement speech on 24 March where he set out the Government’s tax plan to support the UK economy, businesses and families in both the short and the medium term.

Key measures the Chancellor announced as part of the plan include:

An increase to the threshold for Employee’s Class 1 National Insurance and the Lower Profits Limit for Class 4 National Insurance from 6 July 2022, aligning both with the equivalent income tax personal allowance, which is currently set at £12,570 per annum.

From April 2022, self-employed individuals with profits between the Small Profits Threshold of £6,725 and the Lower Profit Limit of £12,570 will not pay Class 2 National Insurance but will still be able to continue to build National Insurance credits.

The Employment Allowance will be increased by £1,000 from 6 April 2022 to £5,000.

An immediate reduction in duty on diesel and petrol from 6pm on 23 March 2022, by 5 pence per litre, for 12 months.

Businesses working in the retail, hospitality and leisure sectors will benefit from a 50% discount in business rates, up to £110,000.

Proposals to reform the tax credits regime for research and development carried out by private companies.

Making green technology, including solar panels and heat pumps, exempt from business rates from April 2022.

A reduction in VAT on energy savings materials (such as insulation) from 5% to 0%.

A reduction in the basic income tax rate from 20% to 19% with effect from April 2024.

If you would like to discuss any of the above changes from this spring statement in further detail or would like to understand how these might impact you personally, please get in touch.