Recently, there has been increasing pressure on Chancellor Rishi Sunak, to bring in significant relief measures to help combat the effects of the current international emergency.

However, speaking at the weekend, pre-empting yesterday’s Spring Statement, Mr Sunak implied that he could only do so much. He acknowledged concerns about price rises and inflation, vowing to stand by people in the same way he’s “done over the past couple of years.” But, in the same breath, he warned that the government could not “completely protect people against some of the difficult times ahead.”

After all, this year’s Spring Statement was only ever intended to be an economic update, released alongside the new Office for Budget Responsibility (OBR) forecast.

However, in light of the UK currently experiencing the most turbulent period in recent European history, a soaring cost of living and inflation hitting a 30-year high, on the second anniversary of the UK’s first lockdown, what the Chancellor delivered was more than a brief update.

Sunak emphasised the OBR had reported “unusually high levels of uncertainty” about the future of the UK’s economy, then went on to announce three immediate measures, designed to “help people right now”.

Hopes of a significant rescue package, of the kind seen during the height of the coronavirus pandemic, were dashed, with one vocal member of Parliament exclaiming, “Is that it?”.

Mr Sunak did have a few more announcements up his sleeve but, will it be enough to help households and businesses across the UK meet their skyrocketing costs?

Below is a summary of the main changes. We have also put together a full Spring Statement Report with an economic outlook and full details of all of the Chancellor’s announcements.

        Read our full report here   >    

Key measures announced:

Immediate measures:

• A reduction in duty on diesel and petrol from 6pm on 23 March 2022, by five pence per litre, for 12 months. 
   
• Scrapping of VAT on energy-efficient home improvements for the next five years.
   
• Doubling of the household support fund from £500 million to £1 billion.

Upcoming changes:

• An increase to the National Insurance Primary Threshold for Class 1 NICs and the Lower Profits Limit for Class 4 NICs from 06 July 2022, aligning it with the equivalent Income Tax Personal Allowance, which is set at £12,570 per annum.
   
• 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 be able to continue to build National Insurance credits.
   
• The Employment Allowance will be increased by £1,000 from 06 April 2022 to £5,000, which will benefit around 495,000 businesses.
   
• A cut in the basic rate of Income Tax to 19% from 2024.

Get in touch

If you would like to discuss how any of the announcements may affect you, give us a call on 01483 205890.