Yesterday’s statement was supposed to be an economic update not a mini-budget.

Lots of rather depressing, but not altogether surprising, statistics, such as the highest rate of inflation in 30 years, and the level of debt and growth being re-forecasted downwards.

However, we were delighted to see that among the measures introduced by the Chancellor, there was an alignment of the national insurance level to the income tax level.

Sunak’s announcements included

  • Cutting fuel tax by 5p per litre until March next year
  • Raising the national insurance threshold by £3,000
  • Announcing a 1% cut in income tax in 2024
  • Abolishing VAT on energy saving insulation.

Sunak also announced that the government would publish “tax plan” that will ensure the government takes a “principled approach to cutting taxes” and will help them achieve their “overarching ambition to reduce tax.

You can download a full copy of the Spring Statement 2022 on the hmrc website, but looking at our current clients, we felt that the most important announcement was the national insurance threshold changes.

If you were hoping to see the planned 1.25 percentage point increase in national insurance scrapped, you will have been disappointed.   This increase will go ahead in April to raise cash for health and social care. Instead, the Chancellor increased the NIC threshold by £3,000 to £12,570 to equalise the NIC and income tax thresholds from July 2024.   So this is good news, as is the increase in the employers employment allowance from £4,000 to £5,000.

The link below gives you access to the full details.