Spring Statement 2022 - Key Points

HM Treasury

The Chancellor of the Exchequer, Rishi Sunak announced his Spring Statement earlier today. We have summarised the key points from today’s announcement.

 

Rishi Sunak opened by highlighting the war in Ukraine and said that he will respond to the conflict by building a strong, more secure economy for the UK.

 

 

State of the Economy

  • The UK economy is forecast to grow by 3.8% this year, according to the Office for Budget Responsibility
  • The economy grew by 7.5% in 2021, after a fall of 9.4% in 2020.

 

Cost of living

  • The annual inflation rate was 6.2% in February and is likely to average 7.4% for the rest of this year, but with a peak of 8.7% in the final quarter of 2022
  • Fuel duty will be cut for only the second time in 20 years by 5p a litre for a full 12 months, taking effect from 6pm on Wednesday
  • Homeowners installing energy efficiency materials such as solar panels, heat pumps or insulation will not pay VAT
  • Local authorities will get another £500m for the Household Support Fund from April, creating a £1bn fund

 

Taxation

  • The 1.25% rise in National Insurance Contributions will remain in place from April
  • The income threshold for at which point people start paying National Insurance will rise to £12,570 in July, an increase of £3,000
  • The basic rate of income tax will be cut from 20% to 19% in 2024. This will be the first cut in income tax for 16 years
  • The Employment Allowance, which gives relief to smaller businesses’ National Insurance payments will increase from £4,000 to £5,000 from April