If you would like to know more about Clever Accounts, please contact us on 0113 518 8800
On the back of rising fuel, energy and food costs, the Chancellor of the Exchequer, Rishi Sunak unveiled his Spring Statement, this week.
The Spring Statement allows the chancellor to detail how the UK’s economy is doing, what it intends to do over the next year and provide an update on progress made since the Budget in October 2021.
In addition tweaks to the announcements made in the Budget can, and often are made.
Following the announcement that inflation rose to a 30 year high of 6.2% in February 2022, there was a lot of pressure on Rishi Sunak to respond to the cost of living crisis, which he stated he has done.
Here are some of the announcements relevant to businesses
From April 2022, the Employers Allowance will increase to £5,000 from £4,000. This allowance allows employers to claim against their employers’ Class 1 National Insurance liability up to a maximum of £5,000 each tax year.
National Insurance threshold increase
The NI threshold will increase by £3,470, to align with the personal allowance of £12,570.
From this July, people will be able to earn £12,570 a year without paying a single penny of income tax or National Insurance,… That’s a £6bn personal tax cut for 30 million people across the United Kingdom.
This tax cut should be worth around £330 a year for employees and does not apply to employer’s Class 1 National Insurance payments.
The Government plans to cut the income tax from 20% to 19%, prior to the end of this Parliament in 2024. Both sole traders and company directors are liable to Income Tax through their self-employment salary and Director Salary.
Fuel duty will be cut by 5 pence per litre until March 2023.
The Motoring group, RAC, has said that cutting fuel duty by 5p will take £3.30 off the cost of filling a typical 55-litre family car.
Some business owners have expressed their disappointment with the recent Chancellor’s statement, saying it does not go far enough to support businesses with rising fuel costs.
0% VAT will be charged on energy-saving materials such as solar panels or heat pumps.
The Government will launch a review into the apprenticeship levy. The review will look at if it is doing enough.
An employer would normally pay Apprenticeship Levy each month if they have an annual pay bill of more than £3 million.
Sign up to Clever Accounts and get fixed fee hassle-free accounting