Author: Gina Christodoulou
The Chancellor made his annual Spring Statement speech on 23rd March 2022 where he set out the Government’s tax plan to support the UK economy, businesses, and families in both the short and the medium term.
Key measures the Chancellor announced as part of the plan include:
National Insurance Primary Threshold increased from July 2022
An increase to the National Insurance Primary Threshold for Class 1 NICs and the Lower Profits Limit for Class 4 NICs from 6 July 2022, aligning it with the equivalent income tax personal allowance which is set at £12,570 per annum.
What does this mean for me?
The change should see the typical employee saving over £330 a year.
National Insurance changes for the self-employed
From April 2022, self-employed individuals with profits between the Small Profits Threshold (SPT) and the Lower Profit Limit will not pay Class 2 NICs, while allowing individuals to continue building National Insurance credits
What does this mean for me?
If you operate as a sole trader, you will only start paying Class 2 NICs when your profits are more than £9,568. Previously Class 2 NICs kicked in when your profits reached £6,515
Increasing the Employment Allowance
The Employment Allowance will be increased by £1,000 from 6 April 2022 to £5,000
What does this mean for me?
If your business has two or more employees, the company won’t pay employer’s National Insurance on the first £5,000
Reducing Fuel Duty
An immediate reduction in duty on diesel and petrol from 6pm on 23 March 2022, by 5 pence per litre, for 12 months.
What does this mean for me?
This cut should have an impact of saving over the next 12 months’ worth around:
* £100 for the average car driver
* £200 for the average van driver
* £1,500 for the average haulier
Other notable changes coming into effect:
- National Living Wage increased to £9.50 an hour from April 2022
- The basic rate of income tax will be cut from 20% to 19% from April 2024
- National insurance thresholds increasing by 1.25% on salary and dividends from April 2022
- Corporation tax rate to increase to 25% from April 2023 but not for companies with profits less than £50,000 – tapering up to £250,000
Want to know what these changes mean for your business? Book a call with one of our experts now and they’ll guide you through.