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News
The Spring Statement – What does it mean for individuals and businesses in Cheshire?
24 Mar 2022
By James Crumpton, Client Success Manager at WR Partners
The Chancellor has made his Spring Statement in the house of commons and I’ve highlighted some of the key takeaways for individuals and businesses in Cheshire;
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Fuel duty will be cut by 5p – this will knock approximately £3.30 off the cost of filling the average family car
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Energy saving materials such as solar panels and heat pumps will now be zero rated for VAT potentially saving individuals £1,000’s on the costs of installing materials or products to improve energy efficiency
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The Health and Social Care Levy of 1.25% remains effective from April 2022
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National Insurance Contribution (NIC) threshold to increase to £12,570 which equates to a £330 per year tax relief.
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Employment allowance for employer NIC increased to £5,000 potentially saving thousands of small businesses an extra £1,000 in employment taxes
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In 2024, the basic rate of tax will be cut by 1% to 19% – the average full time salary in Cheshire is around £31,262[1] so this means an annual tax saving of around £313
My thoughts
The increase in national insurance threshold, bringing it in line with the income tax threshold means employees can earn £12,570 without paying anything in income tax or national insurance. This move is welcome considering the squeeze in the cost of living. Likewise with the fuel duty cuts, with residents in Cheshire travelling an average of 34.8 miles per day[2] and using an average consumption of 36mpg, this could save the average resident £1.10 per week of the cost of their commute over the next 12 months.
However, the government claim 70% of all of the workers will have NIC cut by more than increased through the health and social care levy but a taxpayer with a salary above £34,000 will still pay more tax as a result of the levy and the increase in thresholds combined and I would question whether most households have the cash available to be able to benefit from the reduction in VAT on the energy saving materials.
[1] https://www.cheshirewestandchester.gov.uk/your-council/key-statistics-and-data/state-of-the-borough/skills-and-employment
[2] https://www.cheshirewestandchester.gov.uk/your-council/key-statistics-and-data/state-of-the-borough/transport-and-connectivity
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