Rishi Sunak Spring Statement Announced
In his Spring Statement on the 23rd March 2022, Chancellor Rishi Sunak announced a range of changes that would be introduced across fuel duty, national insurance contributions and income tax.
National Insurance Contributions (NICs)
The Chancellor also announced changes to national insurance contributions in the Spring Statement. The thresholds for national insurance contributions (NICs) will rise to £12,570.
For employees, those earning between £242 (£190 from 6 April to 5 July 2022) and £967 per week will pay NICs at 13.25% from 6th July 2022. Earnings over £967 will attract a 3.25% charge. Employers will pay 15.05% on their employees’ earnings over £175 per week.
Although employees’ NICs only become payable once earnings exceed £242 per week, any earnings between £123 and £242 per week protect an entitlement to basic state retirement benefits without incurring a liability to NICs.
For the self-employed, where their profits exceed £11,908 per annum, they will pay 10.25% on the profits up to £50,270 and 3.25% on profits over that upper profits limit.
However, in readiness for the introduction of the Health and Social Care Levy from April 2023, there will be a temporary increase in the rates of NICs payable for employees, employers and the self-employed starting in April 2022.
Income Tax
The Chancellor pledged that the basic rate of income tax will be cut in April 2024 by 1p in the pound, with the expectation from Office for Budget Responsibility that inflation will be under control and a sustainable fall in debt.
Support for Businesses
Mr Sunak also announced a £1,000 increase to the Employment Allowance which will benefits SMEs, and there will be no business rates due on a range of green technology used to decarbonise buildings. The Chancellor also announced a 50% business rates relief for eligible hospitality, retail and leisure properties.
Chancellor Rishi Sunak said:
‘This statement puts billions back into the pockets of people across the UK and delivers the biggest net cut to personal taxes in over a quarter of a century.
Cutting taxes means people have immediate help with the rising cost of living, businesses have better conditions to invest and grow tomorrow, and people keep more of what they earn for years to come.’
Danielle Harvey ACA, of Harvey, Telford & Bates comments on the changes announced by the Chancellor:
“National insurance contributions are typically straightforward, but the changes to NICs in the 2022 Spring Statement are initially complex. At Harvey, Telford & Bates, we are on-hand to help guide you. To ensure you benefit from the support provided, why not speak to our expert team if you require guidance”
