Chancellor’s Spring Budget Statement

Rishi Sunak announced his spring statement yesterday.

Impact on small and medium businesses (SME’s):

  • National Insurance starting thresholds will rise to £12,570 from July. About 70% of workers who pay NICs will pay less of it (typically £336), even after accounting for the Health and Social Care Levy.

We will review the impact on our clients optimal salary / dividend mix for 2022-23 and be in touch if you are affected.

  • fuel duty for petrol and diesel cut by 5p per litre from 6pm tonight saving around £200 for an average van driver and £1500 for a haulier
  • the basic rate of income tax will also be cut by 1p in the pound in 2024. The cut is worth £5 billion for workers, savers and pensioners and will be the first cut to the basic rate in 16 years.
  • The Employment Allowance increased – a relief which allows smaller businesses to reduce their employers National Insurance contributions bills each year – from £4,000 to £5,000.
  • The Chancellor has committed to improving R&D tax credits to “deliver better value for money for the taxpayer while being more generous”. Details will be announced later in the year.
  • an increase to the National Living Wage, worth £1,000 for full time workers
  • A 100% relief for eligible low-carbon heat networks which have their own rates bill will also be available. This is on top of reducing the VAT on energy savings materials (ESM) from 5% to 0%

These announcements boost the existing business support package, which includes:

  • From April 1, a temporary 50% business rates relief for eligible retail, hospitality, and leisure properties, is also coming in. It is worth £1.7 billion for small businesses
  • Freezing the business rates multiplier for another year saving businesses £4.6 billion over the next 5 years
  • Introducing the temporary super-deduction, for every pound a company invests, their taxes are cut by up to 25p
  • Increasing the Annual Investment Allowance to £1 million – this is a support for capital expenditure provided through the AIA providing full expensing for all SMEs
  • Extending the transitional relief for business rates and supporting small business schemes for 2022-23, which will restrict bill increases from between 15% to 25% for SMEs.
  • Establishing Help to Grow, which is giving SMEs the tools they need to innovate, grow, and help drive our economic recovery. As a result of the scheme 90% of survey respondents have made changes or are planning to make changes to the way they manage, organise or operate their business

Contact us to find out more

20220324_170407 small

Leave a Reply

Your email address will not be published. Required fields are marked *