Chancellor Rishi Sunak made his first Spring Statement (as opposed to a full Budget) on Wednesday 23 March 2022 against a backdrop of rising inflation (partly driven by the war in Ukraine).
In the Government’s fiscal timetable, the Spring Statement is intended to be just an economic update and response to the latest forecasts from the Office for Budget Responsibility, but circumstances forced him to upgrade it to a mini Budget.
In his Spring Statement, the Chancellor therefore announced a limited number of tax measures. Most tax changes taking effect from April 2022 had already been announced and are unaffected, so the summary below covers all key upcoming tax changes whenever first announced. (It does not cover all details of all measures, and proposals may change before enactment, so you should contact us before taking any action based on this summary.)
Although the Chancellor announced a number of headline-grabbing measures, his statement was also notable for its omissions: no changes to previous announcements on public spending (which as these are set in cash terms will be squeezed by inflation – perhaps there will be something in the Autumn full Budget), very little on Green measures or levelling up, and no help for those on benefits – many commentators were left distinctly underwhelmed as to help for the cost of living crisis. And while he announced a Tax Plan, there were few concrete measures to support and incentivise business now.
The respected Institute for Fiscal Studies described Sunak as a ‘fiscal illusionist’ – he says he wants to cut taxes, but even after yesterday’s changes, the overall tax burden will rise to its highest for many years, partly as a result of fiscal drag (many tax allowances are currently frozen in cash terms for several years, so are quickly eroded when inflation is high). Perhaps some of the increases will later be reversed, as and when public finances permit (and we approach the next general election).
If you have any questions regarding the information covered in this summary, or would like advice on a particular area, please get in touch with either your usual contact or any of the UNW Tax partners. Contact details can be found on the final page of this summary PDF.
Updated tax rates for 2022/23
In preparation for the new tax year, a useful guide to the new tax rates and allowances for 2022/23 will be made available on our website on Thursday 31 March 2022.
Please email email@example.com if you would like to request a printed copy of this guide.