Search

How can we help?

Icon

The Spring Statement 2022 – Chancellor’s announcement 

As the nation faces a cost-of-living disaster, Chancellor Rishi Sunak delivered his 2022 Spring Statement, the main points of which we have set out below. 

The Office for Budget Responsibility predicts that the UK economy will grow by 3.8% this year whilst also hitting inflation levels of 7.4%. They have also predicted that inflation will not be back under control until 2024. 

Changes impacting employers and employees: 

  • The National Insurance threshold is being raised to £12,570 from July 2022. 
  • The basic rate of income tax will be lowered from 20% to 19%. However, individuals will have to wait for this cut as the Chancellor confirmed it would not come into effect until “before the end of this Parliament” in 2024.  
  • The Employment Allowance will increase to £5,000 in two weeks’ time. This Allowance allows certain companies to reduce their yearly national insurance liability, and currently stands at £4,000. 
  • The Chancellor has pledged to reform R&D tax credits and expand the generosity of these to include data, cloud computing and pure maths. The Treasury will also consider whether to make R&D expenditure credit more generous.  
  • The Chancellor also confirmed the apprenticeship levy will be assessed and reviewed as part of the government’s new tax plan, to determine whether it is doing enough.  
  • Tax rates on business investment shall be cut in the Autumn Budget. However, the details of this have not yet been confirmed or worked out.  
Monica Atwal

MANAGING PARTNER

View profile

+44 118 960 4605

Responsibility predicts that the UK economy will grow by 3.8% this year whilst also hitting inflation levels of 7.4%

Other changes: 

  • There will be a 5p-a-litre cut to fuel duty which will come into effect at 6pm this evening and will last for one year, until March 2023.  
  • The Government’s household support fund, which helps councils support vulnerable households will be doubled to £1bn from April.  
  • The VAT payable by households on energy saving materials such as solar panels or insulation will be reduced to zero for the next five years. It currently stands at 5%.  

The Spring Statement falls short of the action employers and employees were hoping to see today, perhaps even a feeling of ‘too little too late’. Despite some welcome announcements such as an increase to the Employee Allowance, the changes do not go far enough to address the huge cost pressures employers are facing in such a challenging time for business.  

About this article

Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

Monica Atwal

MANAGING PARTNER

View profile

+44 118 960 4605

About this article

Read, listen and watch our latest insights

art
  • 01 June 2023
  • Employment

Facts employees should know about their personal data

We previously published an article on facts an employer should know about holding personal data, so it is only fair that we also write about the other side of the coin – facts employees should know as individuals whose personal data is held by their employer.

art
  • 01 June 2023
  • Immigration

What is the Immigration Skills Charge (ISC) and how much do you have to pay?

The Immigration Skills Charge (ISC) is a levy on companies who sponsor migrant workers. This levy was imposed on 6 April 2017. The Government states that the charge has been levied to contribute towards addressing the skills gap in the local economy.

art
  • 26 May 2023
  • Employment

Avoiding discrimination in flexible working requests

The right to request flexible working is currently available to employees with at least 26 weeks’ service and is set to be extended further under new Government reforms.

art
  • 25 May 2023
  • Corporate and M&A

Management Buyout – Top 5 things to consider

A management buyout is a financial transaction in which a member of the management team purchases the company from its registered owner. MBO’s usually occur in private companies in an effort to enhance profitability and simplify strategies.

art
  • 25 May 2023
  • Employment

Carer’s Leave Bill set to become law

On 19 May 2023, the Carer’s Leave Bill had its third reading in the House of Lords, and upon receiving Royal Assent, will become law. There is not yet a date for the implementation of this bill, however it is likely that this will happen relatively quickly upon receiving Royal Assent, so is definitely one to keep an eye on.

art
  • 18 May 2023
  • Immigration

Navigating SOC Codes

When it comes to UK immigration, understanding the intricacies of the system is vital. One significant aspect of the process revolves around Standard Occupational Classification (SOC) codes. SOC codes play a crucial role in determining the eligibility for an individual to apply for a work visa, assessing skill levels, and matching individuals to appropriate job roles.