What You Need to Know About the Tax Changes in the Spring Statement

Chancellor Rishi Sunak announced his Spring Statement on Wednesday 23rd March. It included details of basic rate income tax cuts, as well as a raise in all NIC payment thresholds.

A big question you might have, is how these changes will affect you and your business…

National Insurance Changes

Class 1 National Insurance will be increased by £3,000 to be in line with the personal allowance of £12,570. This will be beneficial to all employees and employers.

The class 4 NIC lower profits limit will rise to £11,908 for 2022/23 and then be aligned with the personal allowance of £12,570 from 6 April 2023. This two-step increase is presumably implemented to shadow the delayed rise in the primary class 1 NIC threshold from 6 July 2022.

If you want to know which National Insurance class you're in and how these changes will affect your business specifically, please do not hesitate to get in touch with us.

Income Tax Changes

Income tax for basic rate taxpayers will also see a relief due to the high inflation rates the UK has witnessed already this year.

From April 2024, the basic rate for income tax is set to drop from 20% to 19%. However, with the uncertainty of our economic climate, this may change.

If you would like more information on what this means for you and your business, please do not hesitate to contact us.

Other Changes

Other measures have been announced to control the rising prices of petrol, and to promote greener and more sustainable initiatives.

From 23rd March, there was a 5p reduction for fuel duty per litre in efforts to provide relief for increasing fuel prices.

VAT has also been cut from 5% to 0% on all energy-efficient products.

To find out how these changes may affect you or your business, please get in touch with.

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