Budget 2022 – Key Headlines

With a backdrop of forecast growth of 3.8% this year, eroded by forecast inflation of 7.4% this year and spend of £83b on debt interest alone, The Chancellor of the Exchequer, Rishi Sunak, today announced changes to income tax, fuel duty and National Insurance in his 2022 Spring Statement.

However, many may find themselves somewhat underwhelmed by the changes, with the cost of living increasing at the highest rate since records began nearly 70 years ago, with worse to come once the impact of the Ukraine-Russia war hits. Many calls of “Is that it?” went unanswered, although Rishi did hint more could be done in the future, if required.

Below we summarise the key headlines here. For more detailed analysis, please see our detailed summary.

Key Headlines

Here are the headlines from today’s announcements:

• Fuel duty will be cut by 5p per litre until March 2023, effective from 6pm tonight;
• Homeowners installing energy efficiency materials such as solar panels, heat pumps, or insulation will see VAT cut on these items from 5% to zero for five years;
• Local authorities will get another £500m for the Household Support Fund from April, creating a £1bn fund to help vulnerable households with rising living costs;
• The income threshold for when people start paying National Insurance will rise to £12,570 in July, which Sunak said was a tax cut for employees worth over £330 a year;
• Sunak pledged to cut the basic rate of income tax from 20p to 19p in the pound before the end of this Parliament in 2024; and
• The Employment Allowance, which gives relief to smaller businesses’ National Insurance payments, will increase from £4,000 to £5,000 from April.

The National Insurance rate increases are going to go ahead as planned and reforms to R&D tax credits will be announced in the Autumn (suspected that expenditure credit will become more generous to further encourage more investment in Research and Development).

As always, the devil is in the detail and more information will come to light as the dust settles. We will of course keep you updated across our blogs and social media channels (Facebook, Instagram, LinkedIn, Twitter and YouTube). What do you think of this Spring Statement? Has he done enough? How will it impact you?

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