Guide to the Chancellor’s Tax Plan
An overview of the three phases of the new UK Tax Plan.
On 23 March the Chancellor set out the UK Tax Plan as part of the Spring Statement. He announced that the plan would have three phases:
- tackling the cost of living
- capital, growth and ideas
- sharing growth.
The first phase includes measures announced in the Spring Statement.
ACCA UK has commented on the Spring Statement.
Tackling the cost of living
- raising the National Living Wage to £9.50 an hour from April
- £350 energy bills rebate for eligible households
- fuel duty cut on petrol and diesel by 5p in the pound for 12 months
- aligning Primary Threshold and Lower Profits Limit with Income Tax Allowance from July 2022 to £12,570
- increasing Employment Allowance to £5000 per business from 6 April 2022.
Capital, growth and ideas
- plans announced to cut and reform taxes on business investment
- build momentum behind the super-deduction scheme
- review of incentives for business-led training including apprenticeship levy
- expanded eligibility for R&D tax relief and continued reform considered for RDEC
- engagement with businesses and industry bodies will follow with plans confirmed at Autumn Budget 2022.
- cut to basic rate of income tax from 20% to 19% from April 2024
- simplification programme for tax system – review of reliefs and allowances.
- 23 March 2022: cutting fuel duty on petrol and diesel by 5p per litre
- 6 April 2022: employment allowance raised to £5000 per business
- 6 July 2022: aligning the annual National Insurance Primary Threshold and Lower Profits Limit with the income tax personal allowance, making the first £12,570 of earnings tax free
- April 2023 (expected from start of tax year - date TBC): cutting taxes on business investment - by reforming Capital Allowances and R&D tax reliefs
- April 2024 (expected from start of tax year - date TBC): cutting the basic rate of income tax from 20% to 19%.