Budget 2022 – Announcements and Tax Rates

Implications of the Spring Statement March 2022

Given the continuing rise in basic living costs and now the outbreak of war in Ukraine, the Spring Statement delivered by Rishi Sunak has been eagerly anticipated.  It was highlighted during the speech that the aim was “to reform and reduce taxes”, and below are the key points to take away.

Payroll Taxes

• The planned increase in National Insurance (an additional 1.25% across the Board) is still going ahead from April 2022
• The primary threshold and lower profits limit (the point at which individuals begin to pay NICs) have been substantially increased to bring them in line with the personal allowance for income tax (applies from July 2022)
• Personal Allowances and tax rate thresholds for income tax and capital gains tax are frozen
• The basic rate of income tax will fall to 19% from April 2024 (for those in England, Wales and Northern Ireland)
• The National Insurance Employment Allowance will increase to £5,000 from April 2022
• The implementation of Making Tax Digital for Income Tax has now been delayed to April 2024

Other Taxes

• The Capital Allowance super deduction (allowing 130% of qualifying capital spend to be deducted from taxable profits) remains in place for purchases made between April 2022 and April 2023.
• Corporation tax will increase to 25% from April 2023
• The government intends to introduce a transitional period for Gift Aid, where charities can still claim 20% on donations for three years after the cut to income tax takes effect. Details are still to be announced.

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Liv Burrell

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