{"id":1135,"date":"2022-03-24T11:57:28","date_gmt":"2022-03-24T11:57:28","guid":{"rendered":"https:\/\/accountants247glasgowsouth.co.uk\/?p=1135"},"modified":"2022-03-24T11:57:29","modified_gmt":"2022-03-24T11:57:29","slug":"spring-statement-2022","status":"publish","type":"post","link":"https:\/\/accountants247glasgowsouth.co.uk\/?p=1135","title":{"rendered":"Spring Statement 2022: Your summary of the key points"},"content":{"rendered":"\n<p>The Chancellor, Rishi Sunak, delivered his Spring Statement on 23 March. Faced with the task of creating a \u2018strong economy\u2019 for the UK, against the challenging background of high inflation, rising costs and the threat of conflict in Europe, he announced a raft of new measures.<\/p>\n\n\n\n<p>So, what was in the Spring Statement for your business? And how will these announcements, government measures and new initiatives affect the business landscape in the coming year?<\/p>\n\n\n\n<p><strong>The challenge of creating a stronger UK economy<\/strong><\/p>\n\n\n\n<p>As we head into the second quarter of 2022, your business is facing a demanding economic landscape. Inflation is at a 30-year high, currently measured at 6.2%. There are significant supply chain issues to contend with. And fuel, energy and labour costs are increasing, leading to 73% of UK firms planning to raise their prices to cover rising costs.<\/p>\n\n\n\n<p>What most UK businesses want is action from the government to ease these pressures. So, did the Chancellor\u2019s mini-budget live up to these expectations?<\/p>\n\n\n\n<p><strong>Investment, innovation and growth<\/strong><\/p>\n\n\n\n<p>The Chancellor and the Office for Budget Responsibility (OBR) predict that the UK economy will grow by 3.8% this year. Projections are then for growth of 1.8% in 2023, and then 2.1%, 1.8% and 1.7% in the following three years. The OBR also now predicts that inflation will hit 7.4% by the end of the year. That\u2019s a big hurdle to any kind of meaningful recovery.<\/p>\n\n\n\n<p>What\u2019s needed to counter this demanding economic landscape is a clear focus on growth and productivity for UK businesses. So, did the Chancellor announce the measures that will truly deliver this growth and innovation? There are measures here to support this aim, but it\u2019s likely to be a slow and steady kind of growth.<\/p>\n\n\n\n<p>Key measure announced include:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Employment Allowance<\/strong>&nbsp;\u2013 the&nbsp;<a href=\"https:\/\/www.gov.uk\/claim-employment-allowance\" target=\"_blank\" rel=\"noreferrer noopener\">Employment Allowance<\/a>&nbsp;allows smaller businesses to reduce their employer National Insurance contributions bills. This allowance will rise from \u00a34,000 to \u00a35,000 from April this year. The cut will be worth up to \u00a31,000 for half a million smaller businesses and starts in two weeks\u2019 time.<\/li><li><strong>Business rates<\/strong>&nbsp;\u2013 to support the decarbonisation of non-domestic buildings, the government is introducing targeted business rates exemptions for eligible plant and machinery used in onsite renewable energy generation and storage, and a 100% relief for eligible low-carbon heat networks with their own rates bill.<\/li><li><strong>VAT change<\/strong>&nbsp;\u2013 homeowners installing energy efficiency materials such as solar panels, heat pumps, or insulation will see VAT cut on these items from 5% to zero for five years.<\/li><li><strong>Capital allowances<\/strong>&nbsp;\u2013 the current super-deduction scheme offers an enhanced capital allowance on qualifying purchases of equipment and assets. This super-deduction will end in March 2023, but the Chancellor indicated that the Government wants to offer more help around capital investment for UK businesses. The Government will work with businesses and other stakeholders to consider cuts and reforms that will support future investment.<\/li><li><strong>Employee training<\/strong>&nbsp;\u2013 UK employers spend half the European average on training for their employees. This lack of qualifications is affecting our innovation and productivity. The Chancellor said he intends to make use of the tax system \u2013 including the operation of the&nbsp;<a href=\"https:\/\/www.gov.uk\/guidance\/pay-apprenticeship-levy\" target=\"_blank\" rel=\"noreferrer noopener\">Apprenticeship Levy<\/a>&nbsp;\u2013 to encourage employers to invest in adult training.<\/li><li><strong>R&amp;D Tax Credits<\/strong>&nbsp;\u2013&nbsp;<a href=\"https:\/\/www.gov.uk\/guidance\/corporation-tax-research-and-development-rd-relief\" target=\"_blank\" rel=\"noreferrer noopener\">R&amp;D reliefs<\/a>&nbsp;play a big part in encouraging research and development (R&amp;D) and innovation. UK business R&amp;D investment is less than half of the OECD\u2019s average as a percentage of GDP. To tackle this shortfall, R&amp;D tax reliefs will be reformed to deliver better value for money for the taxpayer. The scope of the available R&amp;D reliefs will also be expanded to cover data, cloud computing and pure maths, to broaden the eligibility to a wider range of businesses, sectors and development.<\/li><li><strong>Other measures<\/strong>&nbsp;\u2013 The&nbsp;<a href=\"https:\/\/www.gov.uk\/business-finance-support\/help-to-grow-management-uk\" target=\"_blank\" rel=\"noreferrer noopener\">Help to Grow: Management<\/a>&nbsp;and&nbsp;<a href=\"https:\/\/www.gov.uk\/business-finance-support\/help-to-grow-digital-uk\" target=\"_blank\" rel=\"noreferrer noopener\">Help to Grow: Digital<\/a>&nbsp;schemes were also highlighted by the Chancellor as evidence of their commitment to provide support for enterprise. And the rise to \u00a31 million for the Annual Investment Allowance will also help support businesses that are looking to invest in their future success.<\/li><\/ul>\n\n\n\n<p><strong>Helping hard-working people<\/strong><\/p>\n\n\n\n<p>The Chancellor acknowledged the need to support hard-working families and business as part of this statement. He reinforced the Government\u2019s and Parliament\u2019s support for the people of Ukraine in the Ukrainian\/Russian war. But he also made it clear that this commitment to providing support may well begin to impact on the UK\u2019s own economy, in time.<\/p>\n\n\n\n<p>However, the Chancellor does have a plan for combating the cost-of-living crisis. Mr Sunak wants to take a \u2018principled approach to cutting taxes\u2019 and to be disciplined in making decisions that will build a stronger economy. He set out the framework for this ambition with a new three-point plan for taxation.<\/p>\n\n\n\n<p>The Government\u2019s plan is intended to:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>Support families with the cost of living<\/li><li>Provide the conditions for growth<\/li><li>Share the profits of this growth fairly<\/li><\/ol>\n\n\n\n<p>Measures to support this include:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Rise in the NIC threshold<\/strong>&nbsp;\u2013 the Government will raise the threshold for the amount people can earn before they pay National Insurance. From July, people will be able to earn \u00a312,570 a year without paying a penny of income tax or National Insurance.<\/li><li><strong>Cut to fuel costs<\/strong>&nbsp;\u2013 fuel duty has been cut by 5p from 6pm on 23 March 2022. This will help to cut fuel costs for many workers who are paying over the odds when commuting. It will also lower the pressure of rising fuel costs for businesses and their fleets.<\/li><li><strong>Planned cut to basic rate income tax<\/strong>&nbsp;\u2013 the Chancellor was adamant that he wants to cut income tax to help those on lower and middle incomes. He stated a promise to drop the basic rate of income tax from 20% to 19% from April 2024. This will mean a cut in tax costs for many workers from 2024 \u2013 as long as the economic conditions allow it.<\/li><li><strong>National Living Wage and Minimum Wage<\/strong>&nbsp;\u2013 don\u2019t forget that the National Living Wage and National Minimum wage are both increasing from 1 April 2022. You can find the&nbsp;<a href=\"https:\/\/www.gov.uk\/government\/news\/large-minimum-wage-increase-to-boost-low-paid-workers-incomes\" target=\"_blank\" rel=\"noreferrer noopener\">new rates for all age groups here<\/a>.<\/li><\/ul>\n\n\n\n<p><strong>Talk to us about the impact of the Spring Statement<\/strong><\/p>\n\n\n\n<p>There\u2019s no simple way to overcome the UK\u2019s economic issues at a stroke. A wealth tax may have been a more immediate solution for raising public funds quickly \u2013 as was suggested by the Shadow Chancellor, Rachel Reeves, in her response. But the Chancellor has taken some positive, practical steps to tackle the cost-of-living crisis in this Spring Statement.<\/p>\n\n\n\n<p>If you\u2019d like to talk through the potential impact of the Spring Statement for your business, please do get in touch. We\u2019ll help you work any incentives and tax reliefs into your financial planning, so you set the best possible foundations for 2022 and beyond.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.bbc.co.uk\/news\/business-60849054\" target=\"_blank\" rel=\"noreferrer noopener\">Read a full breakdown of the Spring Statement from BBC News<\/a><\/p>\n\n\n\n<p><a href=\"\/contact-us\">Get in touch<\/a> to discuss the Budget.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Chancellor, Rishi Sunak, delivered his Spring Statement on 23 March. Faced with the task of creating a \u2018strong economy\u2019 for the UK, against the challenging background of high inflation, rising costs and the threat of conflict in Europe, he announced a raft of new measures. So, what was in the Spring Statement for your [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1136,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","jnews-multi-image_gallery":[],"jnews_single_post":{"subtitle":"","format":"standard","video":"","gallery":"","source_name":"","source_url":"","via_name":"","via_url":"","override":[{"template":"1","single_blog_custom":"","parallax":"1","fullscreen":"1","layout":"right-sidebar","sidebar":"default-sidebar","second_sidebar":"default-sidebar","sticky_sidebar":"1","share_position":"top","share_float_style":"share-monocrhome","show_share_counter":"1","show_view_counter":"1","show_featured":"1","show_post_meta":"1","show_post_author":"1","show_post_author_image":"1","show_post_date":"1","post_date_format":"default","post_date_format_custom":"Y\/m\/d","show_post_category":"1","post_reading_time_wpm":"300","zoom_button_out_step":"2","zoom_button_in_step":"3","show_post_tag":"1","show_prev_next_post":"1","show_popup_post":"1","number_popup_post":"1"}],"image_override":[{"single_post_thumbnail_size":"crop-500","single_post_gallery_size":"crop-500"}],"trending_post_position":"meta","trending_post_label":"Trending","sponsored_post_label":"Sponsored by","sponsored_post_name":"","sponsored_post_url":"","sponsored_post_logo":"","sponsored_post_desc":""},"jnews_primary_category":{"id":""},"footnotes":""},"categories":[70],"tags":[],"class_list":["post-1135","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Spring Statement 2022: Your summary of the key points - Accountants247 Glasgow South<\/title>\n<meta name=\"description\" content=\"Did the Spring Statement 2022 have good news for you? 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