We have just finished listening to the latest announcement from Chancellor Rishi Sunak. Here are the headline announcements from his Spring Statement.
The announcement was split into three measures:
Motorists
Fuel duty will be cut by 5p a litre from 6pm GMT until March 2023. This means that filling a typical 55-litre family car’s fuel tank will be reduced by around £3.30.
Energy Costs
VAT will be abandoned for five years on energy-saving measures such as insulation, solar panels, and heat pumps. This means anyone who purchases energy saving products will not have to pay VAT until 2027.
Rising Costs
Sunak announced the first cut to the basic rate of income tax in 16 years – from 20% to 19% by the end of Parliament 2024.
The National Insurance threshold will be increased by £3,000, meaning people must earn over £12,570 per year before paying income tax or NI. It is a cut for 30 million people worth over £330 a year. This means that 70% of all workers will pay less tax.
The Household Support Fund for local councils to help the most vulnerable individuals affected by rising living costs will be doubled to £1 billion from April.
Retail, hospitality, and leisure sectors will have a 50% discount in business rates of up to £110,000.
There will also be a 50% discount through the Grow Digital scheme, meaning that small businesses will be able to invest more in digital software.
In addition, from April employers can expect the employment allowance to go up to £5,000. This is £1,000 more than previously and means that small businesses can expect cuts in their taxes.
Employment allowance, from April the employment allowance will go up to £5000. Big tax cuts for small businesses.
Other metrics to keep an eye on include:
- Inflation forecast to average at 7.4% this year.
- UK growth expectation has been lowered to 3.8% this year. The economy is then forecast to grow by 1.8% in 2023 and 2.1% in 2024.
