Spring Statement 2022: What You Need to Know
Did Rishi Sunak's Spring Statement contain a bit too much information to digest in one go? We’ve rounded up all of the key points below.
In February inflation was 6.2% and is expected to increase to 7.6% later this year.
Three immediate measures
For only the second time in twenty years, fuel duty will be cut by 5p per litre from 6pm tonight (Wednesday 23rd March). This is the biggest fuel duty cut ever and applies until March 2023. The RAC says this will reduce £3.30 off the cost of filling a typical 55-litre family car.
For the next five years, homeowners will pay 0% VAT on energy efficient systems such as solar panels and heat pumps.
The Household Support Fund, which is allocated to local authorities to support vulnerable households, will double to £1bn in April.
Health and social care levy
The Chancellor confirmed that the health and social care levy will still go ahead.
The personal allowance will remain at £12,570. This is the amount most individuals can earn per year without paying any income tax or National Insurance.
The UK's underlying debt is expected to fall from 83.5% of GDP in the next financial year to 79.8% in 2026-27.
The Employment Allowance will increase to £5,000 from April. The Chancellor said this will be a tax cut of up to £1,000 for half a million small businesses.
The government will also cut tax rates on business investment, which will be set out in greater detail in the Autumn Budget.
National Minimum Wage and Living Wage
From Friday 1st April, the National Minimum Wage and Living Wage will increase for each age band:
Aged 23 and over: £9.50 from £8.91
Aged 21-22: £9.18 from £8.36
Aged 18-20: £6.83 from £6.56
Aged under 18: £4.81 from £4.62
Apprentices: £4.81 from £4.30
Basic rate of tax cut
For his final announcement, Rishi Sunak said that before the end of this Parliament in 2024, the basic rate of income tax will be cut from 20p to 19p in the pound: "A tax cut for workers, for pensioners, for savers. A £5bn tax cut for over 30 million people."
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Tagged as: Government Updates
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