The Chancellor’s Spring Statement 2022 pulled a couple of rabbits out of the hat to help businesses and individuals who are struggling to cope with inflation, which is at its highest level for 30 years, at 6.2%.
Michael Blaken, Optimum’s Accounts Director, said the increase in the National Insurance Contributions (NICs) threshold, to bring it in line with personal allowance at £12,570, would help those on low income. He said plans to reduce the basic rate of income tax from 20% to 19% by the end of this Parliament in 2024 was also good news.
“These measures, and the cut in fuel duty of 5p per litre, will help households and also businesses. They may in turn ease the pressure on businesses to bring in pay rises, because the increase in the cost of living is being shared.”
Michael added that as ever the devil will be in the detail, because while the NICs threshold has increased for employees from April, it appears that employers will be paying the same rate.
“However, the increase in Employment Allowance from £4,000 to £5,000 is good news for employers, because it reduces their annual National Insurance liability by an extra £1,000 per year which helps mitigate the April increase in National Insurance rates of 1.25%.”
Optimum will be providing our detailed summary of the Spring Statement later this week, and if you would like a copy please drop us an email at email@example.com.
For more information about our accountancy and legal services for businesses and business owners in Swindon, Wiltshire, Cheltenham and Gloucestershire please get in touch.