Chancellor Rishi Sunak gave his 2022 Spring Statement yesterday. With many expecting him to do more for the current “cost of living” crisis, we look at what he did announce below:

Major Announcements

  • National Insurance The point at which individuals will start to pay National Insurance (the Primary Threshold) will increase in April 2022 from £9,568 to £9,880 as originally announced, and then rise again on 6 July 2022 to £12,570 aligning it with the income tax personal allowance. This effectively brings forward the Conservative manifesto ambition to increase the NI threshold. Effectively anyone earning approximately £34,000 and below will pay less National Insurance than in 2021/22. Whilst the change benefits those on lower incomes its positive effect is felt most for middle-income households. No change to the previously announced 1.25% NIC increase due to commence in April 2022 (including 1.25% increase on dividend tax rates)
  • Fuel Duty Cut – The much publicised forecast for a cut in fuel duty was confirmed with a 5p a litre cut to petrol and diesel duty effective from 6pm on the 23rd March for the next 12 months. This is estimated to save the average consumer £2 to fill up their tanks.
  • Basic rate Income Tax reduction From April 2024 the basic rate of income tax will fall from 20% to 19%, the first cut to basic rate tax relief in 16 years.
  • VAT relief on solar panels and heat pumps For the next 5 years there will be VAT relief on the household installation of energy saving materials on things like solar panels, heat pumps and insulation taking effect from April 2022. Not applicable to Northern Ireland, although Government will assist the NI Executive via the Barnett formula and subject to raising the matter with European Commission
  • Employment Allowance for employers This will increase by £1,000 to £5,000 from April 2022


  • Pension tax relief – There were no changes to pension tax relief in the Chancellor’s Budget.

Previously announced:

  • Lifetime allowance (LTA) – frozen at £1,073,100. There will be no inflationary increases to the LTA; it will remain at its current level until April 2026.
  • State Pension ‘triple lock’ – The Triple Lock means State Pensions have been uprated each year by the higher of CPI, 2.5% and the average increase in earnings. For tax year 2022/23, the earnings element has been suspended. This means that, in 2022/23, State Pensions will increase by 3.1% (the September 2021 CPI figure).


  • The 2022/23 annual subscription limits for adult and junior ISAs will remain at £20,000 and £9,000 respectively.
  • The Lifetime ISA annual subscription remains at £4,000 per annum (with a 25% bonus from the government)

Income tax

  • Earnings and savings – In England, Wales and Northern Ireland, the basic rate of income tax will fall from 20% to 19% from April 2024. This will apply to both non-savings and savings income. The trust rate will also reduce to 19% for the first £1,000 of income (the standard rate band). The Scottish Government will decide on the rates in Scotland from 2024, but will be supported by additional funding.
  • Dividends – It was confirmed that the rate of tax for dividends will increase by 1.25 percentage points as part of the measures to fund social care reforms. This will mean the new dividends rates for individuals will be 8.75% (basic), 33.75% (higher) and 39.35% (additional). The rate for trustees will be 39.35% on amounts in excess of the trust’s standard rate band.
  • Whilst there is to be an increase in NI thresholds to offset some of the impact of the rate increase to employees, there was no corresponding increase to the dividend allowance to help business owners
  • Allowances and thresholds – The personal allowance and basic rate band will be frozen at £12,570 and £37,700 respectively until 2025/26. This means that the higher rate tax threshold will remain at £50,270 for those entitled to a full personal allowance.
  • Scotland – Aside from any changes from 2024, the Scottish Budget confirmed that the Scottish Starter and Basic Rate bands have been increased by inflation whilst all other bands are to remain frozen.

Capital Gains Tax

  • No further changes announced.

Previously announced:

  • The annual exempt amount will remain frozen at £12,300 for individuals (and personal representatives) and to £6,150 for trustees of settlements, until 2025/26.

Inheritance tax

  • No further changes announced.

Previously announced:

  • Both the nil rate band and residence nil rate band will remain fixed at £325,000 and £175,000 respectively until April 2026.

Corporation tax

  • No further changes announced.

Previously announced:

  • Corporation tax is set to rise to 25% from April 2023. However, small companies with profits below £50,000 will continue to pay at the current rate of 19%. There will also be a reintroduction of tapering relief for businesses with profits under £250,000 so that they pay less than the main rate.

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