Your Quick Guide to the Spring Statement 2022

The Spring Statement is usually only intended to be an economic update, but with inflation hitting a 30-year high of 6.2% in February, the Chancellor has been under pressure to deliver something akin to a mini-Budget.

Here are the main takeaways from the Spring Statement:

March 2022

Cutting fuel duty on petrol and diesel by 5p per litre

April 2022

Cutting taxes on small businesses by up to £1,000 – by raising the Employment Allowance to £5,000

July 2022

Aligning the annual National Insurance Primary Threshold and Lower Profits Limit with the income tax personal allowance, making the first £12,570 of earnings tax free

April 2023

Cutting taxes on business investment – by reforming Capital Allowances and R&D tax reliefs

April 2024

Cutting the basic rate of income tax from 20% to 19%

Reducing Fuel Duty

From 6pm on 23rd March 2022, fuel duty will be cut on petrol and diesel by 5 pence per litre for 12 months. 

• It’s the largest cut across all fuel duty rates ever
• This cut, plus the freeze in 22-23, represents a £5 billion saving over the next 12 months worth around: i. £100 for the average car driver

ii. £200 for the average van driver

    iii. £1,500 for the average haulier

Increasing the employment allowance

Supporting small businesses by increasing the Employment Allowance to £5,000 from April 2022, benefitting around half a million businesses with a tax cut worth up to £1,000 each. 

Increasing National Insurance Thresholds

From July 2022, the government will align the Primary Threshold and Lower Profits Limit with the income tax personal allowance. This will mean:

• The first £12,570 an individual earns will be completely tax-free 
• Almost 30 million working people will benefit
• A typical employee will save over £330 a year
• This is a tax cut worth over £6 billion

Cutting Income Tax

The government will cut the basic rate of income tax from 20% to 19% from 2024. This will:

• Reduce tax for over 30 million workers, pensioners and savers
• Be the first cut to the basic rate of income tax in 16 years
• Make the average taxpayer £175 a year better off