Chancellor Rishi Sunak delivered his Spring Statement today in the House of Commons, against a backdrop of rising fuel, energy and food costs. His challenge was laid bare as prices rose by 6.2% in the 12 months to February – the fastest for 30 years.
The Spring Statement set out new figures on how the UK’s economy is doing and updated Parliament on progress made since his budget in October.
The Office for Budget Responsibility has said it is too early to predict what the exact impact of the war in Ukraine will be.
The Chancellor says their “initial view” is that the UK economy will grow by 3.8% this year. This is a sharp drop from its previous prediction of 6.0%
The projections are for growth of 1.8% in 2023, and then 2.1%, 1.8% and 1.7% in the following three years.
Business Tax Household support fund doubled- money for councils to support vulnerable households will be doubled to £1bn from April. R&D investment – The government will reform tax credits on the money private firms spend on research and development.
The government will also cut tax rates on business investment, with details to be set out at the Budget in the autumn. Employment Allowance – will increase to £5,000, claiming it is a tax cut worth up to £1,000 for half a million small businesses.
- National Insurance threshold raised- From this July, people will be able to earn £12,570 a year without paying income tax or National Insurance. A tax cut for employees worth over £330 a year.
- 5p cut to fuel duty – The cut will come into force at 18:00 tonight and last until March next year.
- Basic rate of tax to be cut by 2024 – for the first time in 16 years” the basic rate of income tax will be cut from 20p to 19p in the pound.
- 0% VAT on energy-saving materials – for the next five years, homeowners will pay 0% VAT on energy saving materials, such as solar panels or heat pumps.
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