These are the measures our Chancellor delivered today to help Britons against the 'cost of living crisis'.
Business owners and consumers were in hope that Rishi Sunak dipped into his war chest to ease the burden of rising costs. However, the government are facing a balancing act to meet their own debt interest repayment costs resulting from the Covid-19 pandemic. The key announcements are as follows:
The threshold at which you start to pay NI will increase by £3,000, to £12,570 and this will apply from 6th July 2022.
This move will bring this in line with the income tax threshold
Self-employed individuals with profits between the Small Profit Threshold and the Lower Profit Limit will not pay class 2 NIC, but HMRC will still allow individuals to be able to build their NI credits.
Employment allowance will be increased to £5,000 from 6th April. This will help nearly half a million businesses.
Overall this will also help towards simplifying the tax system
In 2024 this is set to be cut by 1p in the pound from 20p to 19p
Tax thresholds have been frozen for 4 years
VAT & Duty
VAT to be cut to zero on energy saving devices such as solar panels, heat pumps and insulation. This move is targeted to counter some of the soaring energy prices.
Fuel duty is to be reduced by 5p per litre
The UK economy is set to grow at 3.8% in 2022, which is down from the initial 6% predicted last autumn.
Inflation is set to reach 7.4% this year
Overall, these measures will help towards fighting the rising costs for businesses and employees. Around 70% of the UK workforce will see their tax cut by more than the increase in national insurance contributions (NICS) due in April.
Charterwells are on hand to provide you with help and tailored advice to make sense of how these changes can impact you.