The two headline grabbing comments arising from the Spring Statement 2022 that impact personal taxpayers were the increase in the lower threshold where national insurance contributions are paid (from July 2022) and the reduction in the basic rate of income tax from 20% to 19% (from April 2024).
For businesses, there is an increase to the Employment Allowance to £5,000.
To align the starting thresholds for income tax and National Insurance contributions (NICs) the threshold will increase from 6 July 2022 from £9,880 to £12,570.
The delay until July is to enable software firms time to update their systems for PAYE administration.
The Lower Profits Limit is the point where the profits of the self-employed become subject to Class 4 NICs. From 6 April 2022 the Lower Profits Limit is increased to £11,908 and from 6 April 2023 the limit is increased further to £12,570.
(The self-employed, who will not report their profits and pay the NICs on them, until 2023 will have their NICs calculated on a split-year basis so a threshold of £11,908 will apply for the 2022/23 tax year to account for this)
In addition, there will be no Class 2 NICs on profits between £6,725 and £11,908. £3.15 per week is payable where profits are over £11,908 so the increase in thresholds will remove some businesses from paying these contributions.
Fuel duty is cut by 5 pence per litre across the whole of the UK. This measure took effect from 6pm on 23 March 2022 and is in place for 12 months.
Increased Employment Allowance to £5,000 per year.
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