Spring Statement 2022 Summary & 2022/23 Tax Rates

French Duncan | 24 March 2022


 

Welcome to our summary of the Spring Statement 2022, which you can view below.

In case you missed it, the government have introduced a new 'eco tax', the plastic packaging tax which comes in to effect from 1st April 2022. Find out full details in our blog.

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Some highlights and reminders from our team:

VAT: As the UK is no longer part of the EU, there is now scope to adjust VAT rates on goods and services more freely. At present, the only action Sunak has taken on this is to remove the VAT cost on the supply and installation of Energy Saving Materials (“ESMs”), including solar panels and heat pumps. The measure will be in place from 1st April 2022 and will run for 5 years, and is aimed at helping households keep energy costs down.

HR: Statutory Sick Pay rules have now reverted back to what they were pre-covid.

CORPORATE ADVISORY: Business Asset Disposal Relief remains the same, meaning that business owners may pay only 10% capital gains tax subject to meeting qualifying conditions and a lifetime limit of £1M for each individual.

CORPORATE TAX: The Chancellor is concerned that lack of investment is hampering UK productivity which remains low. A major review of capital allowances is therefore to be conducted, the result of which is likely to see substantial improvements in the allowances for plant and machinery, even if the temporary measures implemented in April 2021 come to an end in April 2023 as expected.

The Statement announces improvements to the R&D tax reliefs, setting out support for data and cloud computing costs, refocusing relief on R&D undertaken in the UK, and allowing businesses to claim relief on R&D supported by pure maths. The Government will continue to reform and improve the R&D tax reliefs at the next Budget. All this is in recognition that the UK R&D spend trails other countries, being half of Germany’s for example.

Reminder: Corporation Tax rates will increase to 25% on 1st April 2023, a 6% rise from the current rate of 19%. The temporary increase in the Annual Investment Allowance (AIA) has been extended to 31 March 2023, allowing 100% tax relief to businesses investing up to £1 million in qualifying expenditure.

PERSONAL TAX: The National Insurance threshold was increased to £12,570, with effect from July 2022. The Employment Allowance will increase from £4,000 to £5,000, providing further relief to National Insurance payments for smaller businesses from April this year.

 

Click below to download our Statement Summary:


Spring Statement 2022 cover


Click below to download our 2022/23 tax rates guide:

Tax rates 2022/23 cover image

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