In a world of quickly-rising inflation, fuel costs and living expenses, keeping up-to-date with the latest finance news is more important than you think – whether it’s for yourself or for your business.
Which brings us to the Spring Statement from Chancellor Rishi Sunak. Announced earlier this week, there are some big changes to be aware of, from Fuel Duty to Employment Allowance.
It’s not always easy to muddle through the lingo, though, so, here, we’ve highlighted some of the key things you need to know.
1. Fuel Duty
As of 6pm on 23rd March 2022, fuel duty has been cut by 5p per litre across the whole of the UK – a measure which is set to remain in place for the next 12 months.
2. Green Energy
Homeowners will see a UK-wide zero rate of VAT from April 2022 for the installation of energy saving materials, such as rooftop solar panels or wind turbines, for the next five years.
3. Business Rates Discount
The Leisure and Hospitality Sector will be a business rates discount of 50% for up to £110k, effective from April, over the next five years.
4. Employment Allowance
From April, Employment Allowance will increase from £4,000 to £5,000, which gives relief to smaller businesses' National Insurance payments.
5. Dividend Rate
The dividend rate will increase by 1.25% on all current rates from 6th April 2022.
6. National Insurance Contributions
The income threshold for at which point people start paying National Insurance is set to rise to £12,570 this July. This is estimated to cut tax for employees by more than £330 a year.
7. Basic Rate Income Tax
For the first time in 16 years, there will be a cut to Basic Rate Income Tax from 20p to 19p in the pound by 2024, the end of this parliament.
What this all means…
While these key changes are largely positive, it’s important to note that annual inflation in February rose to 6.2% and is set to average around 7.4% for the rest of the year (with UK living standards set to fall at the fastest rate since the 1950s).
And while the UK economy is forecast to grow by 3.8% this year, according to the Office for Budget Responsibility, this is actually a sharp cut from its previous prediction of 6.0%.
Wondering how this could affect your business? To discuss how to plan your business’s finances for the next year, get in touch with the Venton team right here.