Spring Statement 2022
The Chancellor made his annual Spring Statement speech on 23 March 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. Now the dust has settled let’s review what’s going ahead and what it means for you.
Key announcements include:
1.25% increase in National Insurance Contributions (NICs) – from 6 April 2022
Despite lobbying to delay the upcoming increase payable by employees, employers and the self-employed, the government has decided to go ahead as planned, to provide additional funds for health and social care.
Class 2 NIC liabilities of the Self-Employed – from 6 April 2022
Self-employed individuals with profits between the Small Profits Threshold (SPT) of £6,725 and the Lower Profit Limit of £11,908 will not pay Class 2 NICs, allowing individuals to continue to build National Insurance credits.
This will benefit approximately 500,000 self-employed individuals by saving them £165 a year.
From 6 April 2023, Class 2 NIC will only be payable by those with profits over £12,570.
Employment Allowance increased to £5,000 – from 6 April 2022
The Employment Allowance will be increased by £1,000, which will benefit around 495,000 businesses with most saving £150 in the tax year.
Increase in the starting NIC threshold for Individuals – from 6 July 2022
The National Insurance Primary Threshold for Class 1 NICs for employees, and the Lower Profits Limit for Class 4 NICs for the self-employed were due to increase from £9,568 to £9,880, but instead will increase to £12,570 per year, the same as the equivalent income tax personal allowance.
In the tax year to 5 April 2023, this is a NIC cut worth £267 for most employees and £207 for most self-employed individuals.
Crucially, this will more than negate the impact of the 1.25 percentage point NIC increase for most workers with employment earnings of less than £34,000, providing them with a small contribution to the increased cost of living.
Business Rates Reliefs – from 6 April 2022 (brought forward by one year)
- The business rates multiplier will be frozen in 2022-23.
- Green Technology used to decarbonise buildings, including solar panels & batteries and heat pumps will be exempt from business rates.
- Eligible low-carbon heat networks will receive 100% relief.
- 50% relief for eligible retail, hospitality and leisure properties.
The full detail on all the measures can be found on GOV.UK.
MATCH is working hard to keep on top of all the latest news and government support so, as always, feel free to get in touch if you have any queries and we’ll be happy to help.
MATCH Accounting Limited