UK Chancellor Rishi Sunak this afternoon announced his Spring 2022 Statement from the UK Government.
Within this announcement, The Chancellor affirmed the Government’s commitment to stand behind businesses in the UK. Boosting productivity and productivity within the UK is key to the Spring Statement, as are the plans to incentivise firms to train more, invest more and innovate more through tax cuts.
Further details of the Spring Statement have been summarised below:
A cut to Fuel Duty
From 6pm GMT tonight, the 23rd March 2022, fuel duty on petrol and diesel will be cut by 5p per litre for the next 12-months.
This cut, in addition to the freeze in 2022-23 represents a £5 billion saving over the next 12 months, worth around £200 to the average driver, or £1,500 for the average haulier.
Increasing the Employment Allowance
The Employment Allowance will be increased from £4,000 to £5,000, which allows businesses to reduce their employer National Insurance contributions (NICs) bills this year.
Around 495,000 businesses will benefit from this £1,000 increase (30% of all businesses), which includes 3% of businesses who would be taken out of paying MICs and the Health and Social Care levy entirely.
Exemption on business rates for Green technology
Green technology, including solar panels and heats pumps, will be exempt from business rates from April 2022. This will save businesses an extra £35 million in the 2022-23 financial year.
It is anticipated that this will be worth around £170 million over the next five years to support the decarbonisation of buildings.
An additional 100% relief for eligible low-carbon heat networks will also be available, along with a reduction from 5% to 0% of VAT for Energy Saving Materials (EMS) for businesses.
Reforming R&D Tax Credits
The UK is seen a world-leader in the research and development of AI and robotics manufacturing and design. From April 2023, businesses will be able to claim relief on the storage of their data for pure maths research. Draft legislation will be published in the summer.
The Government also released a series of potential policy changes to the UK’s existing capital allowances schemes, which the Government will consider ahead of April 2023.
These policies will aim to encourage business investment once the super-deduction ends to drive forward productivity growth. Business organisations and other interested parties will be consulted with, from now until the Autumn.
|New Spring Statement measures:
|Comes into effect:
|Fuel duty cut
|6pm Wed 23 March 2022
|Increase in Employment Allowance
|Business Rates relief for Green technology
|R&D tax relief
|0% VAT on ESMs
|Changes to Capital Allowances regime
*The Northern Ireland Executive will receive a Barnett share of the value of this relief until it can be introduced UK-wide.