Macclesfield company on the Spring Budget 2022: A summary on what it means for you

By Guest 29th Mar 2022

A Macclesfield accountants have revealed what the Spring Budget will mean for you.
A Macclesfield accountants have revealed what the Spring Budget will mean for you.

Against a backdrop of rising inflation, Chancellor Rishi Sunak presented his Spring Statement on Wednesday 23rd March 2022. This was not intended as a Budget and accordingly, there were relatively few new announcements. Our note covers the changes announced.

The news headlines are dominated by a cut in fuel duty for petrol and diesel, and an increase in the starting thresholds for National Insurance contributions (NICs). The increase in National Insurance will still be implemented in April 2022.

For businesses, there is an increase to the Employment Allowance, as well as relief from business rates on a range of green technologies and help with training and the adoption of digital technology.

You should contact us before taking any action as a result of the contents of this summary.

Increase in the National Insurance threshold and lower profit limit

Chancellor Rishi Sunak announced an increase in the annual National Insurance Primary Threshold and the Lower Profits Limit in his 2022 Spring Statement. Primary Class 1 contributions are paid by employees and directors. To align the starting thresholds for income tax and National Insurance contributions (NICs) the threshold will increase from 6th July 2022 from £9,880 to £12,570. However because the increase in the threshold is only from 6th July 2022, where National Insurance is calculated on an annual basis, for example for directors, the annual threshold will be £11,908 for the 2022/23 tax year. The Lower Profits Limit is the point where the profits of the self-employed become subject to Class 4 NICs. From 6 April 2022, the Lower Profits Limit is increased to £11,908 and from 6th April 2023, the limit is increased further to £12,570. In addition, there will be no Class 2 NICs on profits between £6,725 and £11,908. £3.15 per week is payable where profits are over £11,908. Increase in national insurance rates

The previously announced increase in the rates of NICs payable for employees, employers and the self-employed in April 2022 will go ahead. This is as a transitional provision in readiness for the introduction of the Health and Social Care Levy from April 2023.

With the increase to the thresholds announced in the Spring Statement, from 6th July 2022 employees earning between £242 (£190 from 6th April to 5 July 2022) and £967 per week will pay NICs at 13.25%. Earnings over £967 will attract a 3.25% charge. Employers will pay 15.05% on their employees' earnings over £175 per week.

Although employees' NICs only become payable once earnings exceed £242 per week, any earnings between £123 and £242 per week continue to protect entitlement to basic state retirement benefits without incurring a liability to NICs.

For the self-employed, where their profits exceed £11,908 per annum, they will pay 10.25% on the profits up to £50,270 and 3.25% on profits over that upper profits limit.

Income tax reduction

The Chancellor announced an intention to reduce the basic rate of income tax from April 2024. The change will be implemented in a future Finance Bill. Increased employment allowance

In the Spring Statement, the Chancellor announced an increase from April 2022 of £1,000 for eligible employers to reduce their employer NICs by up to £5,000 per year.

VAT on energy-saving materials

The Chancellor announced a UK wide, time-limited zero rates of VAT from April 2022 for the installation of energy-saving materials. This will apply to installations such as rooftop solar panels. This is in addition to the extension of the VAT relief to include additional technologies and the removal of complex eligibility conditions. Green reliefs for business rates

The government is introducing targeted business rates exemptions for eligible plant and machinery used in onsite renewable energy generation and storage and a 100% relief for eligible low-carbon heat networks with their own rates bill. It was announced in the Spring Statement, that these measures will now take effect from April 2022, a year earlier than previously planned.

Fuel duty

In a measure announced in the Spring Statement to help all motorists – individuals, small businesses and hauliers – fuel duty for petrol and diesel is cut by 5 pence per litre across the whole of the UK. This measure took effect from 6pm on 23rd March 2022 and is in place for 12 months. Get in touch

Call or email us at Harts if you have any queries about topics covered above or to find out more about our services at Harts.

Call us on 01625 669669 or email [email protected].

They also have a premesis on Westminster Road.

     

New macclesfield Jobs Section Launched!!
Vacancies updated hourly!!
Click here: macclesfield jobs

Share:


Sign-Up for our FREE Newsletter

We want to provide macclesfield with more and more clickbait-free local news.
To do that, we need a loyal newsletter following.
Help us survive and sign up to our FREE weekly newsletter.

Already subscribed? Thank you. Just press X or click here.
We won't pass your details on to anyone else.
By clicking the Subscribe button you agree to our Privacy Policy.