The UK Chancellor today delivered his much heralded Spring Statement. At Shipleys Tax we look at some of the brief highlights.
Basic rate of income tax to be cut to 19p by 2024
- Basic rate of income tax to be cut from 20% to 19% for the tax year ended 5 April 2024 (to be confirmed)
- The first cut of income tax rates in 16 years
National Insurance threshold to be raised by £3k
- National Insurance threshold raised by £3,000 for both Primary Class 1 and Class 4 NI
- This will further align with income tax thresholds, removing an historic anomaly
- The threshold at which employees and the self-employed will start to pay national insurance contributions will rise from £9,880 to £12,570 a year.
- The increase will be implemented from July this year (2022)
- Employers will benefit too, as the Employment Allowance that offsets Secondary Class 1 NI will increase from £4,000 to £5,000. This will also come into effect from April 2022.
- Most likely to dampen effects of the incoming Health and Social care levy of 1.25%
VAT on energy saving devices to be cut to zero
- VAT will be cut to zero on energy saving devices
- This includes thermal insulation and solar panels, and similar items.
- Fuel duty was also cut by 5p per litre, effective from 6pm on 23 March 2022.
- This cut will last for one year, subject to any extension.
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