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Building a Stronger and More Secure Economy

The Spring Statement, in its current form at least, is generally seen as a way of delivering an interim report; reflecting on progress since the previous Autumn Budget and starting to set out the stall for future measures. In part this Spring Statement was no different, with The Chancellor, Rishi Sunak, announcing consultations in areas such as a reform of Research and Development (R&D) tax credits and incentivising innovation.

 However, this year The Chancellor also had to look outwards, factoring in the cost of the war in Ukraine; looking at how the combination of sanctions, the effect on global trade, and UK efforts to support Ukraine would affect the economy. And whilst the OBR is forecasting growth of 3.8% this year, The Chancellor also had to be mindful of a 2022/23 debt interest payment of £83 billion, more than four times that of the current tax year.

Nevertheless, Rishi Sunak was also aware of the cost of rising prices on UK businesses and households. He took the decision not to change the Health & Social Care levy which is due to take effect from April, but he did take the unusual step of announcing a number of other measures in this Spring Statement. Highlights include:

 A cut in fuel duty of 5p per litre to take effect from 6pm on 23 March 2022.

• An equalisation of National Insurance and Income Tax thresholds from July 2022. That is an increase of £3000 in the NI threshold.
  
• A 1% reduction in income tax basic rate from 20% to 19% to take effect by the end of this Parliament in 2024.
  
• VAT to be abolished on solar panels, heat pumps, and home insulation for five years with effect from April 2022.
  
• Smaller businesses to benefit from an increase in the Employment Allowance from £4000 to £5000 with effect from April 2022.