Earlier today Chancellor Rishi Sunak announced some economic updates and changes following the UK’s current inflation rise at the start of 2022. He also announced the publishing of a “Tax plan”, that ensures the government will take a “Principled approach to cut taxes” which will help the government to achieve their “overarching ambition to reduce tax”.
The Chancellor also announced a few teases for the Autumn Budget which include a tax rate cut, a review into the R&D tax relief form and also some kind of “fix” to the tax treatment of capital investment which is currently less generous than other advanced economies (He is referring to the Capital Allowance Super Deduction which is set to end in March 2024 – see here)
So what really was spoken about?
- A 5p per litre fuel duty cut starting tonight at 18:00 – This was previously frozen in the 2021 Autumn Budget
- Due to no longer being contained by EU law, homeowners having Solar Panels, Heat Pumps or Insulation installed will no longer pay 5% VAT – Likewise, wind and water turbines will also be Zero-rated.
- For the 1st time in 16 years, income tax will be reduced by 1% before the end of parliament in 2024 (so from April next year)
- The National Insurance increases by 1.25 percentage points from April 2022 will still go ahead.
- From July, the National Insurance threshold will increase by £3,000 to make it the same as the current personal tax allowance. (£12,570)
- For Employers, the employer’s Allowance will be increased from £4,000 to £5,000, which will benefit around 500,000 businesses.
- an additional £500 million to the Household Support fund, on top of the £500 million already provided since October 2021
- The business rates multiplier will be frozen for 2022/23, with eligible retail, hospitality and leisure businesses benefitting from a new temporary 50% business rates relief.
