2022 Spring Statement
On 23rd March, The Chancellor delivered his Spring Statement, with the focus being on the current cost of living crisis. Sunak announced a number of measures, designed to ease pressure on those worst affected.
The first measure announced is that the annual National Insurance threshold is increasing to £12,570 from July 2022 onwards, bringing it in line with the current tax threshold.
This means that for the first £12,570 each individual earns, no income tax or NIC will be payable.
The Chancellor did however confirm that the Health and Social Care Levy (announced in September 2021) will remain in place. This levy accounts for the 1.25% rise in National Insurance, effective from April.
The Employment Allowance is increasing from £4,000 per annum to £5,000 from April onwards.
This means that employers will only begin paying Employers NI across to HMRC once (and if,) their cumulative liability for the year exceeds £5,000.
The Chancellor announced that by 2024, the basic rate of tax will reduce to 19% (currently 20%.)
Sunak also confirmed that he would cut tax rates on business investment as part of the Autumn Budget, once the Super-Deduction ends in March 2023.
Autumn Budget Refresher
- As announced in the Autumn Budget, the dividend tax rate is set to increase by 1.25% from 6th This means dividends will be taxed at 8.75 %, 33.75% and 39.35% at the basic, higher and additional rates respectively.
- The National Living Wage is set to increase to £9.50 from 6th April, to £9.50 for those aged 23+.
If you would like to find out more about the measures outlined in the Spring Statements, please get in touch.