Spring 2022 Statement Summary
The Chancellor of the Exchequer, Rishi Sunak, used the Spring Statement to deliver a raft of measures to alleviate the rising cost of living, caused, he said, by the recent pandemic and Russia’s invasion of Ukraine.
Announcing the “biggest net cut to personal taxes in over a quarter of a century” the Spring Statement focused on helping working families and strengthening the UK economy, with the most prominent announcements being the temporary reduction of fuel duty, the long awaited alignment of income tax and employee National Insurance thresholds and a proposed reduction of the basic rate of income tax for UK taxpayers, as outlined below.
From 23 March 2022, fuel duty was reduced by 5p per litre; this reduction will remain in force for 12 months and delivers a real saving of 6p per litre including VAT.
National Insurance Contributions (NIC)
The Primary NIC threshold, the threshold above which employees pay NIC, will increase to £12,570 from July 2022, aligning it with the personal tax threshold.
The Secondary NIC threshold, the threshold above which employers pay NIC, remains unchanged.
Although it was announced in the Spring Budget 2021 that UK income tax rates and thresholds will remain frozen until April 2026, the Chancellor announced that the rate of tax paid by UK resident basic rate taxpayers will reduce to 19% from April 2024.