Spring Budget 2022

There has been so much focus on the cost of living in recent months and the Chancellor Rishi Sunak delivered his Spring Statement this lunchtime as the cost of energy and food continue to rise.

We’ve known for some time about the planned National Insurance increase in April but there was some relief today when the Chancellor raised the threshold for paying National Insurance by £3,000 to £12,570. That means the threshold will now match the income tax threshold from July and more than offsets the 1% increase for many on lower incomes. Mr Sunak says the move is worth over £330 a year and means 70% of workers will effectively get a tax cut. He said it was the largest increase ever in the basic tax threshold.

Self-employed people, who pay at a different rate, will see slightly less of a benefit from the Chancellor’s decision. And, as the threshold is frozen more low-earners will eventually see themselves having to pay more.

There was further news on the tax front – he announced the basic rate of income tax will go from 20% to 19% by the end of the Parliament in 2024.

It had been heavily hinted that the Chancellor would also do something on fuel duty and today he announced 1 5P cut to fuel duty from 6 pm tonight.

However, it is unlikely many will be celebrating the tax changes today which come at a time when inflation rose by 6.2% in the 12 months to February – the fastest for 30 years.