2022 Spring Forecast
Chancellor Rishi Sunak delivered the 2022 Spring Statement on 23rd March 2022 and we have summarised some key tax changes below.
The Employment Allowance will increase from £4,000 to £5,000 from 06 April 2022
Eligible employers will be able to reduce their NIC liability by up to £5,000 per year meaning they can employ four full-time employees on the National Living Wage without paying employer NICs.
The basic rate of income tax falls from 20% to 19% from April 2024
The tax rate of earnings for a Scottish taxpayers will not be affected by this, because the power to set these rates is devolved to the Scottish Government. For Scottish taxpayers this tax rate reduction only affects savings income, such as bank interest.
Increasing National Insurance thresholds
The NIC threshold for employees and the self-employed respectively, will increase from £9,880 to £12,570 from July 2022. This applies to all types of NIC. The planned increase in rates, by 1.25% on 06 April 2022, will still go ahead. Therefore, some individuals will see a temporary increase in NIC between April and July.
Temporary cut to fuel duty
The government cut the duty on petrol and diesel by 5p per litre for 12 months. This came into effect from 6pm on 23 March on a UK-wide basis. Fuel duty makes up 35% of the price of petrol. The cut would take approximately £3.30 off the cost of filling a typical 55-litre family car.