Spring statement 2022

Despite what any headlines suggested, the Spring Statement was not meant to be a March mini-Budget, as Rishi Sunak believes in the once-a-year approach. However, like 2020 and 2021, recent events have made it difficult to stick with this approach. Instead, on the day the inflation rate was announced as having reached 6.2%, the Chancellor announced a range of tax cuts aimed at countering the cost-of-living crisis.

Some of the key notes are:

Fuel duty
There will be a temporary 12-month cut to duty on petrol and diesel of 5p per litre from 23 March 2022.

VAT relief
This will be extended for the installation of energy saving materials (ESMs) and there will be a time-limited zero rate for the installation of ESMs.

National Insurance Contributions

• The primary threshold for Class 1 National Insurance contributions will increase to £12,570 a year from 6 July 2022
• For company directors, the equivalent annual amount from July will be £11,908
• For the self-employed, the lower profits limit will increase to £11,908 in 2022/23, rising to £12,570 in 2023/24

Employment allowance
This will be increased to £5,000 from April 2022.

Research and Development (R&D)
From April 2023, all cloud computing costs associated with R&D, including storage, will qualify for relief. Some expenditure on overseas R&D activities will still be able to qualify, for example, clinical trials that cannot be conducted in UK.

Our Tax Tables are up to date with everything announced in the Winter Economy Plan 2021, Autumn Budget 2021, the Scottish and Welsh Budgets 2021 and the Spring Statement 2022.

If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected by the announcements, please contact us to discuss them.