Rishi Sunak has delivered his Spring Statement, how will it affect you?

23/03/2022 / Liberty news

With the ongoing invasion of Ukraine contributing to the increasing cost of living, Rishi Sunak delivered his Spring Statement the same day inflation figures revealed they had hit a 30 year high of 6.2%.

In his Statement, Sunak revealed inflation is forecast to average 7.4% for the year.
According to the Office of Budget Responsibility (OBR) the UK’s economy is set to grow 3.8% in 2022 – lower than previous estimates. However, the OBR also noted: “Given the evolving situation in the war in Ukraine and the global response, there is significant uncertainty around the outlook for global Gross Domestic Product (GDP).”

With that said, Sunak tempered expectations, saying he wanted to take a sensible approach to sustainable public finances.

Still, there were a number of notable tax changes made today which could affect you.
He kept in place the increase to the National Insurance (NI) Rate due to come into force next month. However, in order to help ease the burden for taxpayers, he announced the threshold for paying NI would be increased by over £3,000 – to £12,570. This brings the threshold to the same level as Income Tax.

High earners will still end up with high NI costs, however it will reduce the impact for lower earners.

As expected, the Government also signalled a 5p per litre cut in fuel duty to help motorists struggling with increasing prices. The cut is planned to last for 12 months.
Along similar lines, the Government also expanded the scope of its VAT relief available for energy saving material (for example heat pumps and solar panels). These materials will now incur 0% VAT for the next five years.

The Household Support Fund for local councils will also be doubled to £1 billion from April.

Looking ahead, the Government revealed that the basic rate of income tax will be cut by 1p from 2024. Announcing the change, Sunak said: “Given the evolving situation in the war in Ukraine and the global response, there is significant uncertainty around the outlook for global Gross Domestic Product (GDP).”

Previewing the Autumn budget, Sunak announced a series of reviews taking place, including reviews into Business Investment Tax, R&D Tax credits and the Apprenticeship Levy.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.


Click to read the article

Categories

Related
news

New tax year checklist

As world events continue to buffet the economy, the new tax year may not be the first thing on your mind. But using available tax breaks while you have them helps put you in a much more stable financial position for the short and the longer term.

Creating a world you believe in

Let’s think about the future for a moment. Our world in the future. A world that is cleaner, safer, and fairer: one that you want to live in, and the one you want to pass on to future generations.