With the escalating conflict in Ukraine, today’s statement is rightly overshadowed by the growing humanitarian crisis.
However, in the UK, amidst rising inflation and a need to plug the gaping financial hole of Covid recovery, there is an impact on Dafferns clients from today’s announcements and we are pleased to summarise the main headlines as follows:
- Fuel duty cut by 5p per litre until March 2023, commencing tonight
- Over the next 5 years, VAT for homeowners on energy saving materials (solar, wind turbines, heat pumps etc) to be cut from 5% to 0%
- Health and social care levy to remain and commences in April 2022 to impose an additional 1.25% on NIC rates and dividend tax
- NIC threshold for employees to increase by £3,000 to the income tax personal allowance of £12,570 from this April (the personal allowance is now frozen)
- Consultation with business for the Autumn budget on the tax plan including Apprenticeship levy, reform of R&D tax to increase the benefits whilst reducing abuse and capital investment
- Business rate discounts for retail and leisure industry from April of 50%
- Employment allowance for small businesses increases to £5,000 from this April
- By end of Parliament in 2024 – a “promise” that income tax basic rate to be cut from 20% to 19%
Interesting use of promises to reduce income tax rather than immediate action. We will watch this space in terms of using Covid recovery, Brexit and the illegal invasion of Ukraine for missed targets.
It was disappointing to note the lack of detail about rising energy prices and the increasing problem of the cost of living crises, that Martin Lewis estimates will push 10m in to fuel poverty. Additionally, there was no real focus on encouraging an energy industry sector move to renewable energy.
Additional detail on the R&D review to include an increase in savings and encourage innovation, along with other business taxes is eagerly anticipated in the Autumn Budget and the Dafferns team will stay tuned to keep you informed. We still optimistically await announcements on a low carbon economy to promote job creation, economic growth and protecting our environment for future generations.
For now, keep your armbands handy for that Spring tide.