The Chancellor today gave his Spring Statement at a time when the cost of living continues to soar and the ongoing war in Ukraine brings continued uncertainty. Rishi Sunak says this statement will help to build a stronger, more secure economy in the face of the conflict. We’ve summarised the key points from the statement below. Look out for more detailed analysis from us in the coming days.
- Despite much opposition, the Health and Social Care Charge remains, but there is a £3,000 increase in the national insurance threshold to align it with the personal allowance (£12,570) from July 2022 meaning workers can earn this amount before being subject to any income tax or national insurance. This will have a bearing on business owners looking to optimise their income through a combination of salary and dividends so please be sure to speak to us before processing your April payroll.
- As a further mitigation of the Health and Social Care Charge, the small business Employment Allowance will increase to £5,000 from April 2022.
- The basic rate of income tax will be cut from 20% to 19% in 2024.
- There was talk about a new “Tax Plan” to be published which may lead to significant changes with further reference to business tax cuts coming Autumn budget, specifically for business investment. This will be accompanied by a review and reform of R&D tax reliefs.
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