23rd March 2022 – Member Update
Dear Member
The Chancellor this afternoon delivered his Spring Statement. He has ‘done what he can’ to ease the cost of living crisis with a much trailed fuel duty cut and a few adjustments to NI and tax. Here are the highlights.
General Economic Status
- UK economy will grow by 3.8% this year followed by 1.8% in 2023, and then 2.1%, 1.8% and 1.7% in the following three years.
- Inflation will average 7.4% this year before dropping to 4% in 2023 and 1.5% in 2024
- The unemployment rate will be 4.5% this year, dropping to 4.0% next year and remaining stable at 4.1% for the next three years
- Government debt will be 96.3% of GDP this year before slowly falling to 89.4% in 2026/27
Fuel Duty
- From 6pm this evening, the Government will reduce main rates of petrol and diesel by 5p per litre, and other rates proportionately for 12 months.
VAT
- A VAT rate of 0% will be applied to energy-saving materials materials, such as solar panels or heat pumps.
National Insurance
- The annual National Insurance Primary Threshold and Lower Profits Limit, for employees and the self-employed respectively, will increase from £9,880 to £12,570 from July 2022.
- From April, self-employed individuals with profits between the Small Profits Threshold and Lower Profits Limit will not pay class 2 NICs
Employment Allowance
- From April, Employment Allowance will; be increased from £4,000 to £5,000 As a result, businesses will be able to employ four full-time employees on the NLW without paying any employer NICs
Personal Income Tax
- The basic rate for personal tax rate will decrease from 20% to 19% from April 2024 Green Reliefs For Business Rates
- At Autumn Budget 2021 the government announced the introduction of targeted business rate exemptions from 1 April 2023 until 31 March 2035 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, to support the decarbonisation of non-domestic buildings. The government is bringing forward the implementation of these measures and is announcing that they will now take effect from April 2022.
R&D Tax Reform
- From April 2023, all cloud computing costs associated with R&D, including storage, will qualify for relief.
Levelling Up Fund – Second Round
- The government is launching the second round of the Levelling Up Fund and is publishing a refreshed Prospectus, inviting bids from all eligible organisations.
The full statement can be read here:
Counterfeit bank notes – we circulated a crime bulletin this week about counterfeit £20 notes from Clydesdale Bank. We have also become aware of some counterfeit English £20 banknotes doing the rounds in the Midlands.
I have been discussing the situation with the Bank of England and whilst they do not have responsibility for Scottish notes the issues and the responses are the same. The banks are in touch with note handler manufacturers who are, as I am sure you will be aware, working on patches to detect fraudulent notes. For those that might see a £20 in the cash desk, it is important staff are aware of the fraud and take extra steps to identify and confiscate counterfeit notes (this is a legal requirement).
The Bank of England has some very helpful training resources as part of its banknote checking scheme which I would encourage you to sign up to:
https://www.bankofengland.co.uk/banknotes/banknote-checking-scheme
For Scottish notes the Association of Commercial Banknote Issuers is the place to go.
MGD Guide – we have previously circulated as well as made available at EAG the attached new MGD issued by HMRC. They are now asking for feedback and would appreciate any member who has a couple of minutes to take the short questionnaire here:
Kind regards
John
John White