Taking a look at the Spring Budget

23rd March 2022

Our Finance Director Judith Aspin takes us through some of the key changes from the Spring Budget.

Hot on the heels of the highest inflation level for 30 years comes the Spring Statement.

Our headlines are that:

Fuel Duty will be cut by 5p a litre from 6 pm today until March 2023

The 5p reduction also has VAT on top, so it comes out at 6p a litre reduction, which the RAC has said is equivalent to a £3.30 reduction on a typical 55-litre family car.

The National Insurance threshold increases by £3,000 to £12,570 from July

Anyone earning under £12,570 will not pay tax or National Insurance (NI) from July. Those earning up to £35,000 will pay less NI or the same as you currently do from July.

However, remember there's a 1.25% NI increase coming into effect in April, so this will initially cost people more until the threshold changes in July.

Energy-efficient materials VAT cut from 5% to 0%

If you're considering installing energy-efficient goods, such as solar panels, heat pumps or insulation, you'll be pleased that the VAT is decreasing; unfortunately, the general inflation increase will probably negate this benefit.

Basic income tax rate to reduce by 1p to 19p from April 2024

This change is expected in April 2024 if the economy is progressing satisfactorily. This is a benefit but is still some way off happening.

Overall, some welcome changes; however, the impact is not very large given the increases in costs that many people are facing.