The Spring Budget 2022

** Please see our updated blog following the Government’s Mini Budget in September 2022**

The Chancellor announced the Spring Budget today, so what are the most crucial updates?

He did announce most changes in his Autumn Budget, so what’s new?


National Insurance threshold rising

  • The threshold increases from £9,880 to £12,570 from 1 July 2022
  • This will be in line with the personal allowance for income tax.
  • This means an extra £2,690 before employees and the self-employed start to pay NIC, a saving of over £330 per year
  • This is for employees, not employers

Employment allowance rises to £5,000 from April 2022

  • The employment allowance will rise from £4,000 to £5,000 from 1 April 2022
  • This is for employers eligible for small employers’ relief
  • The allowance will be used to reduce your employers’ NIC contributions up to £5,000
  • As soon as the £5,000 is used up, you will start to pay above this

Who gets the employers’ NIC allowance?

  • Employers with NIC contributions of £100,000 or less in the last complete tax year
  • Bear in mind that the 1.25% NIC increase in 2022/2023 may push you above the threshold

Basic rate income tax reduced to 19% from April 2024

Don’t get too excited as this isn’t happening for 2 years.

Basic rate income tax will reduce from 20% to 19% from 6 April 2024

This means that 1p in the £1 will stay in your pocket, not the Government.

The reason for making this reduction is because inflation and the cost of living rising.

Making Tax Digital for VAT compulsory from 1 April 2022

  • Businesses with turnover over £85,000 have been required to register for MTD for VAT for some years
  • This is a new requirement for businesses with turnover below £85,000
  • Here’s the HMRC link to sign up to MTD for VAT, if you haven’t already done so.

Fuel duty cut by 5p per litre of fuel

  • This will take immediate effect from 6pm 23 March 2022
  • The Government says this should save the average 1 car family £100 over a year
  • It should save van drivers £200 per year, while hauliers could save £1,500 a year

What else do we need to know?

There are a lot of changes, so do get in touch if we can support you through the minefield!