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Spring Statement 2022
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Sunak goes on a Spring Statement tax cut spree

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Against the backdrop of a growing cost of living crisis and economic pressures exacerbated by the war in Ukraine, Rishi Sunak used today’s Spring Statement to slash fuel tax, change the national insurance threshold and unveil a surprise cut in income tax to 19% in 2024. 

23rd Mar 2022
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The Spring Statement is usually intended only to be an economic update, but with inflation hitting a 30-year high of 6.2% in February, the Chancellor has been under pressure to deliver something akin to a mini-Budget.

While there weren’t enough announcements to fill a medium-sized red book, Sunak responded to the cost of living squeeze in the House of Commons this lunchtime by:

  • Cutting fuel tax by 5p per litre until March next year 
  • Raising the national insurance threshold by £3,000
  • Announcing a 1% cut in income tax in 2024
  • Abolishing VAT on energy saving insulation.

Sunak also announced the publishing of a “tax plan” that will ensure the government takes a “principled approach to cutting taxes” and will help them achieve their “overarching ambition to reduce tax. Publishing a tax plan. Take a principled approach to cutting taxes.”

While the big headline-grabbing measures respond to the rising living costs, he also highlighted the need to create “a new culture of enterprise” with the private sector training more, investing more, and innovating more.

Along with the roll out of the tax plan (which is already available on gov.uk), the Chancellor announced a few teases for the Autumn Budget including: 

  • An R&D tax relief form in the Autumn Budget
  • A tax rate cut in the Autumn Budget
  • Increasing employment allowance to £5,000

“This statement puts billions back into the pockets of people across the UK and delivers the biggest net cut to personal taxes in over a quarter of a century,” said Sunak.

He added, “Cutting taxes means people have immediate help with the rising cost of living, businesses have better conditions to invest and grow tomorrow, and people keep more of what they earn for years to come.”

Income tax

In the shock rabbit-out-of-the hat announcement at the end of his speech, Sunak announced “for the first time in 16 years” a 1% cut in income tax before the end of the Parliament in 2024. Sunak said this would be a £5bn tax cut. 

Not everyone was as positive as the Conservative Party about this cut. Paul Johnson, economist and director at the IFS, said: “What is the possible justification for cutting income tax rate while raising NI rate?

“Drives further wedge between taxation of unearned income and earned income. Yet again benefits pensioners and those living off rents at expense of workers.”

VAT 5% rate on energy saving materials cut to zero

Elsewhere, Sunak said that being “no longer constrained by EU law” allowed him to scrap the 5% VAT rate on energy saving insulation and solar panels. He said this would “abolish all red tape imposed on us by EU”. This cut will not apply immediately to Northern Ireland. 

“From 2019 the European Court of Justice required us to restrict its eligibility thanks to Brexit, so I can announce for the next five years, homeowners having materials like solar panels, heat pumps or insulation installed will no longer pay 5% VAT – they will pay zero,” said Sunak. 

He also confirmed that the government will reverse the EU's decision to take wind and water turbines out of scope and zero rate them. “And we will abolish all the red tape imposed on us by the EU,” he said.

 

 

National insurance

Steadfastly ignoring the growing discontent from the Tory party backbenchers, Sunak confirmed that the planned 1.25 percentage point increase in national insurance will go ahead in April to raise cash for health and social care. 

However, the Chancellor tried taking the sting out of this roll of the new health and social care levy by increasing the NIC threshold by £3,000 instead of the planned £300. He said this would equalise the NIC and income tax thresholds in one go from July. 

This takes the new NI threshold to £12,570. He quoted the IFS as saying this is the best way to help low and middle income workers.

Tim Walford-Fitzgerald, partner at accountancy firm HW Fisher, said, “The decision to raise the threshold people earn before they pay national insurance is a long overdue simplification and will make it easier for the Chancellor to take the next step in aligning income tax and NIC.”

Fuel duty

As costs continue to spiral at the pumps, Sunak’s decision to slash fuel duty had been strongly expected in the days leading up to today’s speech. 

The 5p per litre comes into effect at 6pm this evening and is worth £5bn. However, Richard Murphy pointed out on Twitter, “Fuel duty being cut by 5p per litre, which is less than the increase in VAT now being paid on each litre of fuel bought. In other words, this is costing him nothing.” 

Fuel duty was previously frozen for 12 months at the Autumn Budget in October last year. 

R&D tax relief

Sunak had set the foundations for the R&D tax relief overhaul during his Mais Lecture when he said, “clearly it is not working as well as it should” for small and medium-sized companies. 

“Right now we know that the amount businesses spend on R&D as a percentage of GDP is less than half the OECD average. And that is despite us spending more on tax reliefs than almost every other country. Something is not working,” he said.

So Sunak confirmed that the government will reform R&D tax credits so that “they’re effective and better value for money. [This] will expand the generosity of the release to include data cloud computing and pure maths. And we’ll consider in the autumn whether to make the R&D expenditure credit more generous.”

Today’s news comes as the spending review committed to a £39.8bn R&D budget for 2022-2025

Sunak also noted that the super deduction ends next year, which means “our overall tax treatment for capital investment will be far less generous than other advanced economies.” So they are committed to “fixing that” in the Autumn Budget. 

Economy: Expect largest fall in living standards on record

With inflation surging above expectations to a 30-year high of 6.2% in February, up from 5.5% in January, Sunak was keen to set the sobering inflation figures and growth expectations against the backdrop of the Ukrainian conflict, explaining that “the actions we have taken against Putin are not cost free.”

He highlighted the need for “the security of more resilient public finances” and that “more borrowing is not risk or cost free.” 

The Chancellor confirmed that public debt is expected to fall steadily and the cost of servicing debt interest is to rise to £88bn.

According to the Office for National Statistics, real household disposable incomes per person will fall by 2.2% in 2022–23, the largest fall in a single financial year since ONS records began in 1956–57.

Confronting rising costs

Today’s announcement follows weeks of speculation and discussion from the tax profession on ways the Chancellor can confront the rising costs at the pumps and energy suppliers. 

No Chancellor will ever green light every tax reform floated before a fiscal speech, but Sunak had a lot of policy kites and lobbying to choose from as all comers tried to rectify the rising cost of living. 

There had been calls from the opposition to scrap the 5% VAT on domestic fuel. Although critics of this plan said a cut like this wasn’t targeted enough for those that needed help the most. 

As Shadow Chancellor Rachel Reeves argued when Sunak sat down, a policy missing from Sunak’s speech was a one-off windfall tax on oil and gas giants. The policy had again gathered support from the opposition benches.

Prompted by the end of the super deduction scheme in March 2023 the Chancellor had also faced calls from business for more investment and even an extension to the tax break. Sunak alluded to this and we can expect more of this in the Autumn Budget.

Spring Statement at a glance

Community reaction

Pre-Spring Statement analysis

AccountingWEB Live

Spring Statement coverage brought to you in association with Accounting Excellence.

2022 Spring Statement in association with Accounting Excellence Awards

 

Replies (51)

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By RogerMT
23rd Mar 2022 14:02

I have never understood why the social care levy was raised on NI and not income tax, other than the arcane notion that NI goes to fund the NHS. Anyone who still believes that needs to wake up! As has been pointed out, the substantial number of people making a decent living out of rental income contribute nothing, at the expense of every PAYE employee. Although raising the NI threshold to the same as the tax threshold will help, and is long overdue, if they don't want to admit raising the levy on NI is a mistake, why not make rental income a schedule D, thereby making the landlords pay class 4 & 2, like every other self-employed person?

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Replying to RogerMT:
By ireallyshouldknowthisbut
23rd Mar 2022 18:24

Income tax is a much broader base and hits landlords, pensioners and others on non paye income. Lots of pensioners read the tory press and vote for them. The large tory donors pay the piper to play the tune of not taxing those types of incomes. By shoving up NI and reducing
...possibly...income tax in 24 he actually cuts taxes for those on non paye incomes. The only surprise is hitting dividends. It would have been much sounder economically to add 1p to income taxes across the board...but its not about that.

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By Latinaid
23rd Mar 2022 14:03

'Paul Johnson, economist and director at the IFS, said: “What is the possible justification for cutting income tax rate while raising NI rate?

“Drives further wedge between taxation of unearned income and earned income. Yet again benefits pensioners and those living off rents at expense of workers.”'

I though the NI rate was only being increased for the 22/23 tax year? After that, isn't it returning to current levels, being replaced by a Health and Social Care Levy, which will be paid by pensioners and landlords as well as workers?

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Replying to Latinaid:
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By listerramjet
23rd Mar 2022 14:06

Sure. Just off to investigate some oink oink noises coming from the garden

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By listerramjet
23rd Mar 2022 14:04

So does a "principled approach" to tax cutting mean raising taxes? Asking for a somewhat poorer friend!

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By petestar1969
23rd Mar 2022 14:08

I assume the change in NI threshold to £12,570 is only for Employees NI? If so, its completely worthless to company directors who take a small salary and then dividends. Before you all mention the increase in the Employers Allowance, this isn't available to companies with only one employee...

1p of income tax in April 2024? Sounds like an empty promise as the next General Election should be before April 2024 and there may well be a change in government.

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Replying to petestar1969:
paddle steamer
By DJKL
23rd Mar 2022 14:21

They may start to take more salary to get a state pension, wonder where the earnings line re entitlement will be drawn.

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Replying to petestar1969:
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By Catherine Newman
23rd Mar 2022 14:32

I would hope the Employers threshhold has been raised. I got excited until I read your post.

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Replying to Catherine Newman:
Scooby
By gainsborough
23rd Mar 2022 15:02

I think Pete's right. Can't see anything in the draft legislation mentioning an increase in the employer threshold https://assets.publishing.service.gov.uk/government/uploads/system/uploa...

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Replying to petestar1969:
By Charlie Carne
23rd Mar 2022 15:01

If there is only one director, it's still worth paying salary at £12,570 in 2022/23, as er's NI at 15.05% is less than the CT saved at 19%.

And you could always employ someone part-time for just one week, paid at the LEL level of £120 pw (current rate, as I'm not sure what this rises to in 2022/23), as you can then claim the employment allowance. Daft, I know, which is why I've always thought that, instead of convoluted rules around preventing claims for sole director as sole employee, employment allowance should only be offset against er's NI for non-directors.

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Replying to petestar1969:
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By neiltonks
23rd Mar 2022 15:09

It's the Primary threshold that's being increased so yes, it looks like employee-only. Also, the tax cut only applies to taxpayers in England and Northern Ireland. The governments in Scotland and Wales set their own tax rates and are not bound to follow the Chancellor's lead.

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
23rd Mar 2022 14:08

Judging from the contents of Twitter's #SpringStatement feed, environmentalists are not impressed by the Chancellor's claim that the VAT cut (from 5% to 0%) on energy saving materials was a result of post-Brexit freedoms. If it was, why are other European countries already zero-rating such items?

Here's another representative example from @cecilia_keating -

Only one mention of Net Zero in entirity of 50+ page #SpringStatement doc released by @hmtreasury , amid a smattering of mentions of decarbonisation

You would be thinking emissions reduction wasn't, ahem, a national priority that dovetails with need to shore up energy security

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By SXGuy
23rd Mar 2022 14:15

Petrol stations near me put prices up by 5p last night in anticipation of the 5p cut. Thanks for that

5% cut in cost of solar panels, still gonna cost me for my house over 10k to be self reliant on clean energy.

Thanks for the help Chancellor.

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By hiu612
23rd Mar 2022 14:21

Also, given the rise in petrol prices, even with a 5p cut in duty there is still more tax on a litre than before the price jump as there's something like 7p more VAT being paid per litre.

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By kestrepo
23rd Mar 2022 14:35

Anyone else picked up that the NI Primary Threshold and Lower Profits Limit is changing in JULY!

Am I reading this right and that this is a mid-year tax rate change?

Taken from the Spring Statement 2022 on HMRC’s website:
The government will reform and reduce taxes in three ways:
• Helping families with the cost of living. The Spring Statement increases the annual
National Insurance Primary Threshold and Lower Profits Limit from £9,880 to £12,570,
from July 2022. This aligns the Primary Threshold and Lower Profits Limit with the income
tax personal allowance. This will help almost 30 million working people, with a typical
employee benefitting from a tax cut worth over £330 in the year from July

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Replying to kestrepo:
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By SXGuy
23rd Mar 2022 14:53

I don't get why he picked July. So everyone will pay at the old rate for 3 months? I'm baffled.

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Replying to SXGuy:
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By MCV71
23rd Mar 2022 15:26

All I can think of is to allow time for payroll providers (especially the software developers) to update systems.

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Replying to MCV71:
By ireallyshouldknowthisbut
23rd Mar 2022 16:09

MCV71 wrote:

All I can think of is to allow time for payroll providers (especially the software developers) to update systems.

Surly they just go into their table of rates, change it and reissue their software. it is not as if this stuff is hard coded in. I am really miffed about this, its make problems where there ought not be any.

The earliest pay run with April PAYE in wont be run for several weeks, say a weekly pay to 8th April, the bulk of payroll wont be run until the end of April.

I suspect its more about HMRC not being agile enough to change it quickly.

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Replying to ireallyshouldknowthisbut:
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By wadders5
24th Mar 2022 14:20

I wonder how it will work for those that tick the Director box on their payroll and get an annual recalculation!?

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Replying to wadders5:
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By Hugo Fair
24th Mar 2022 19:25

It will (or at least should) use the figure dictated by HMRC (which is a single figure for the year from pro-rating the two different figures for the two periods) ... which is why the S-E figure for 2022-23 is different from the one for 2023-24.

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Jennifer Adams
By Jennifer Adams
23rd Mar 2022 14:52

For anyone that is interested ... :-)

Rishi S is taking calls on LBC tonight at 7p,

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Replying to Jennifer Adams:
Stepurhan
By stepurhan
23rd Mar 2022 16:29

Jennifer Adams wrote:

For anyone that is interested ... :-)

Rishi S is taking calls on LBC tonight at 7p,

7p per call? Another way of trying to get money out of people?

:-)

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By tedbuck
23rd Mar 2022 15:07

I do get very tired of the whingers for whom nothing is good enough except to criticise.

I don't have a lot of sympathy for politicians as they do come over as very short-sighted but poor old Rishi has a really poisoned chalice in his remit.

Having spent a fortune on COVID at Boris's (and everyone else's) behest he now has to cope with more crises that any Chancellor has seen for many a long year and all people can do is carp.

Do they want him to act like a Labour Chancellor and p**s the taxpayers future taxes against the wall to get a plus point now.

It's about time that the public recognised that money doesn't grow on trees and that we all will have to share the pain. Fine to help the people at the bottom but really we all have to learn to stand on our own feet and stop relying on Nanny State to look after us because at the end of the day it can't because it is too wasteful and inefficient.

So my message to the whingers is - Grow up!

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Replying to tedbuck:
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By Latinaid
23rd Mar 2022 15:17

So your message to people who've been managing up to now on their salaries, but who now find their energy bills rocketing, food bill increasing, and cost of driving to work going up (in my case) from 16p per mile to 24p per mile (an increase of about £30 a month for my only-part-time job) is - GROW UP????

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Replying to Latinaid:
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By tedbuck
23rd Mar 2022 16:56

Yes, that's the message - there isn't a magic money tree, there isn't a magic money tree. We are going to have to live with it and it will get worse unless Vlad can be stopped so we may as well get used to it.
Yes I do have sympathy for those who deserve it but many of the voices raised in anguish about their state can afford it. My petrol has gone up, my food has gone up, my electricity has doubled and I have just paid an oil bill where the price has trebled.

Hopefully it is temporary but if it isn't we shall have to grin and bear it because there just isn't the money in the coffers to mop it up and Covid has used more than enough money to make borrowing a problem in a period of rising interest rates. I am not defending the Government's actions over the last two years but would another government have done better? - I think not. Basically politicians have little knowledge of reality (Like HMRC) and waste most of what they spend.
But it doesn't alter the facts - it's going to get worse before it gets better and increasing the borrowing just makes it all very much worse.
So - we will have to learn to live with it.

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Replying to tedbuck:
By Nick Graves
23rd Mar 2022 15:43

Sunak's apparently a WEF Young Global Bleeder and his family's heavily invested in Big Pharma, so he has none of my sympathy as he's partly responsible for the entire fiasco.

And according to Magic Money Tree theory, yes it does, apparently.

There's sadly no way back to sound money from this level of largesse, so it's all merely window-dressing until it all collapses upwards, I fear.

As for changing the NI rates during the year, that's just asking for headaches. That's the sort of thing that creates accountants' ire.

Doesn't matter who you vote for - the bloody Government always gets in...

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Replying to tedbuck:
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By justsotax
23rd Mar 2022 16:24

Rishi ain't 'poor' just fyi....

Boris spent 'our' money on covid....not his own...

Labour apparently p**s taxes up the wall....conveniently Rishi appears to have found that magic money tree.....

Share the pain....you don't seem to want to sahre in that pain Ted....you sound a little bitter that we live in a society (one of the richest) that looks after its own (well that was the big brexit sell wasn't it....but apparently that is only true when it suits)....

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Replying to tedbuck:
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By DavidWinter
24th Mar 2022 08:15

Well there's a nanny state, and there's the NHS and essential public services being gradually bumped out of existence. Yes people should stand on their own two feet but I would also like to live in a country where you have some kind of safety net, where having COVID won't bankrupt you, or if you want an education, it won't be an extra mortgage. Say what you like about labour, but we need a bit of a left turn for a few years - we're getting closer and closer to that American dream the longer the conservatives are in charge.

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Replying to tedbuck:
Chris M
By mr. mischief
24th Mar 2022 09:19

On the contrary, there is a ready made solution to BOTH levelling up and the national debt. And if the November 2021 Investors' Chronicle readers' survey is anything to go by, a decent proportion of wealthier, older people WANT to pay more tax so the poor and young don't pay for our blunders, but we do.

So he COULD raise £40bn or more per year by:

1. Scrapping Principal Private Residence relief and the CGT exempt allowance.
2. Having 0% inheritance tax on the first £2m and then 100% thereafter.

Overall 2 out of 10. Get your money on Liz Truss for next Prime Minister, you heard it here first!

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Replying to mr. mischief:
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By tedbuck
24th Mar 2022 10:28

Well there's a great idea - that would drive all the money out of the country and stop people moving house - isn't stamp duty a property tax enough on moving house?

I know you're joking but a politician may read it and think you are serious and putting forward a bright idea and implement it. I should think you would be the target of every wealthy person's hit squad.

What the government ought to be doing is governing and making sure that the taxpayers' money is well spent which doesn't mean throwing it willy nilly at the NHS which is totally inefficient if you are on the receiving end and look at the other civil 'service' departments - HMRC, DVLA, Education and so on - none of them efficient and working (Covid gets the blame of course - but the rest of the world is expected to cope). I'll bet the NHS threw rather a lot of money away over Covid which could have been better spent than on Nightingale Hospitals with no staff to run them and PPE contracts with Turkey , China and the like whilst UK suppliers could have supplied but NHS wasn't interested. (Wonder why - don't you?)
I am not a conspiracy theorist - all this stuff is well known and obvious if you have to deal with the relevant departments and it all comes down to a very inefficient civil service pandered to by the Government. Did you see that the latest is that Civil Servants may be given more flexible working so that the can do the school run? You can see that in the real world where people actually expect service from their suppliers. We are now so accustomed to failures from state 'services' that we take it for granted.
It really needs a change of focus to make the civil service work efficiently and competently. No more PFI type deals or deals like the SNP's ferries deal which will cost the taxpayer millions.
End of rant!

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Replying to tedbuck:
By coops456
05th Apr 2022 06:46

All the things you mention are/were political decisions. It wasn't "the NHS" that made deals with Tory donors for non-existent PPE, it was political diktat. It's not the Civil Service that sets policy, it's the government.

If I worked in the public sector, the years of austerity and budget-slashing would have me so demoralised that I'd want to leave... oh wait, exactly what's happened to all the knowledgeable HMRC staff. And what is wrong with flexible working patterns?!

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Replying to tedbuck:
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By mbee1
24th Mar 2022 10:02

tedbuck wrote:

I do get very tired of the whingers for whom nothing is good enough except to criticise.

I don't have a lot of sympathy for politicians as they do come over as very short-sighted but poor old Rishi has a really poisoned chalice in his remit.

Having spent a fortune on COVID at Boris's (and everyone else's) behest he now has to cope with more crises that any Chancellor has seen for many a long year and all people can do is carp.

Do they want him to act like a Labour Chancellor and p**s the taxpayers future taxes against the wall to get a plus point now.

It's about time that the public recognised that money doesn't grow on trees and that we all will have to share the pain. Fine to help the people at the bottom but really we all have to learn to stand on our own feet and stop relying on Nanny State to look after us because at the end of the day it can't because it is too wasteful and inefficient.

So my message to the whingers is - Grow up!

I'm with the whingers! He has done nothing to help those on benefits or pensioners. The triple lock was abandoned this year so people who receive a state pension are already worse off with inflation. Neither do they pay NI.

Why a national insurance levy? I have clients with rental income from multiple properties and they're laughing all the way to the bank!

I'm with Labour on a windfall tax. The energy giants are making huge profits and the tax should have been used to offset the increase in gas and electricity prices.

A 5p fuel duty cut! A saving of £3.30 on a full tank. Hardly worth it.

Sunak also looked extremely uncomfortable on Sky News earlier when asked about his wife's investments in Infosys - a company continuing to trade in Russia. And do he should.

I'm sorry but he hasn't achieved what he set out to achieve - or perhaps he has! I'm afraid the Tory party are dead in the water.

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Replying to tedbuck:
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By Practice Admin Monkey
24th Mar 2022 10:18

It'd be interesting to see a follow up related to lack of spending resulting in £4/6billions cutes to education and NHS/care. Making 'em dumber and with less access to healthcare is a long term strategy win, surely?

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By Charlie Carne
23rd Mar 2022 15:12

I'm delighted that, at long last, the National Insurance primary threshold and Income Tax personal allowance are to be aligned, simplifying the tax system for employees and exempting the lowest paid from all employment taxes. I do hope that the PT and PA are to be permanently merged in the legislation, or a future budget could start to move them apart again for political benefits.

However, the cynic in me wonders whether the huge increase in NI threshold announced today had been planned long ago as a positive publicity give-away, already paid for by the NI hike that was announced last year, as that extra 1.25% won't now impact anyone earning less than £41,389.

The combination of tax and NI does, of course, make a mockery of the Chancellor's other announcement that the basic rate will drop from 20% to 19% in 2024/25, as the marginal rate of tax/NI/social care levy on someone earning (say) £40k will increase from 32% in 2021/22 to 32.25% in 2024/25.

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Replying to charliecarne:
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By Latinaid
24th Mar 2022 18:34

[quote=charliecarne]

However, the cynic in me wonders whether the huge increase in NI threshold announced today had been planned long ago as a positive publicity give-away, already paid for by the NI hike that was announced last year, as that extra 1.25% won't now impact anyone earning less than £41,389.

I may have misunderstood, but I thought there was to be an extra 1.25% on NI (Class 1 + Class 4), for anyone earning over (now) £12,570?

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By Open all hours
23rd Mar 2022 15:22

A National Insurance cut for the employee but not for their self employed employer?

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Replying to Open all hours:
By Charlie Carne
23rd Mar 2022 15:35

The employer gets an extra £1,000 on their employment allowance.

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Replying to charliecarne:
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By Open all hours
23rd Mar 2022 16:52

But the employers Class 4 threshold is unchanged?

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Replying to Open all hours:
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By Latinaid
23rd Mar 2022 17:04

I'm guessing you mean Class 1? Class 4 is for the self-employed.

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Replying to Latinaid:
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By Open all hours
23rd Mar 2022 20:26

No, I meant Class 4 which The Telegraph misreported. Commons library the more accurate I hope.

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Replying to Open all hours:
By Charlie Carne
23rd Mar 2022 17:17

The Class 4 threshold is changing in line with the Class 1 primary threshold. But the Class 1 secondary threshold (whether the employer is a company or sole trader) is not changing beyond the normal CPI rise.

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Morph
By kevinringer
23rd Mar 2022 16:17

Re the July NI change, I'm trying to recall how it used to be in pre-digital days. From what I recall the Budget was in Feb/Mar and the new NI kicked in from 6 April and the tax code change from about week 7. In the 2 months (or less) between the Budget and the start of the tax year, HMRC had to print all the tables and distribute them to employers. That's a huge amount more work than in today's digital age yet it seemed to work. Or am I not remembering it correctly?

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Replying to kevinringer:
By ireallyshouldknowthisbut
23rd Mar 2022 18:38

It's bonkers. It can't take more than a few minutes to change the rate in commercial software. It will just be a number in a table. Then all the employer does is download it. Should be done by Friday. Instead it's a massive change with split rates which may mean considerable extra programming for the payroll companies and cause all sorts of problems between now and July.
My guess is HMRC can't change thier end quick enough and have saddled the rest of the economy with their issues.

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Replying to ireallyshouldknowthisbut:
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By spilly
23rd Mar 2022 19:44

Going by the glacial rate of responses that HMRC are currently managing, a three-month delay is almost speedy.

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Replying to ireallyshouldknowthisbut:
Morph
By kevinringer
24th Mar 2022 06:37

I agree. The fuel duty cut of 5p kicked in just hours after the Budget. We're all used to changes from 6 April. Software is designed to cope with changes from 6 April. Has there ever been a mid-year change in NI before? I don't recall any. I suspect most software (including HMRC) won't be able to cope without massive changes. It would be so much less hassle all round to make the change on 6 April.

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Replying to kevinringer:
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By Open all hours
23rd Mar 2022 20:26

Spot on. All the power of the software packages and we’re back before 1980.
Also, now that RTI has settled in we hardly ever see a P45 in the pocket of a new starter employee theses days. Something else which has gone backwards.

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By North East Accountant
23rd Mar 2022 16:44

More fiddling with the tax system for no other than purely political purposes.

A tax plan......nice sounding idea....the reality.......a few sound bites which will soon be forgotten.

All this hokey cokey and with the total mess of public finances..........."Debt interest next year will be £83Bn, more than 4 times last year's figure". And that's with interest rates at 0.75%.

£83 Billion on interest in one year...!!!

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By jamiea4f
23rd Mar 2022 16:59

So pretty much he’s just using the extra duty & VAT windfall due to the extortionate price of fuel to fund this supposed “spree” and still refuses to drop the “paying our mates for covid supplies” tax, sorry “social care levy”. Some giveaway.

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By ireallyshouldknowthisbut
23rd Mar 2022 18:32

I am confused by your headline. My maths show in real terms pretty much anyone with a PAYE income over about 26k is post inflation worse off. Fiscal drag is the key issue and why the OBR is reporting a 10% rise in taxes 19/20 to 26/27 from 33% to 36.3% of GDP.

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By tedbuck
24th Mar 2022 10:35

What happens to Directors with cumulative NIC?

Will it be a straight apportionment - if so how calculated?

Will HMRC manage to agree with the software companies?

More fun ahead.

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