How the Chancellors Spring Statement affects us
Today Rishi Sunak the UK's Chancellor gave his Spring 2022 statement. With the cost of living rising at unprecedented rates, I'm sure that many of us tuned in, in anticipation awaiting the announcement.
Whilst the Shadow secretary had hoped that there would be a windfall tax applied to gas and oil companies like BP, unfortunately that was not the case.
MP's within his own Conservative party had hoped that the rise on National Insurance would be completely scrapped but again this was not the case.
With the Office of National Statistics confirming inflation rising by 6.2% in February 2022, the Chancellor had been forced to step in and help households cope with the significant cost of living.
Businesses and drivers will be pleased to hear that fuel duty has been cut by 5p per litre. This is effective from 6pm this evening, so we'd hope to see the cost per litre at fuel stations reduce by this amount across the UK. This will remain in place until March 2023.
Whilst many people will be be pleased to hear that income tax for the lower level earners will decrease from 20% to 19%, this isn't effective until 2024, so not likely to help them pay their household bills in the meantime. What will be effective sooner is the rise on your personal tax allowance. From July 2022, you can earn £12,570 before having to pay income tax or National Insurance.
VAT will be scrapped on energy saving materials such as solar panels and heating installation.
There will be a significant deduction in business rates for those in certain sectors such as retail and hospitality.
Most businesses won't feel any benefit from today's statement other than the 5p per litre reduction on the their fuel costs and given that the cost per barrel is extremely unpredictable at the moment and forecast to continue to rise, we predict very uncertain times for everyone ahead.
Employment allowance for businesses will increase to £5,000 next month, which is currently set at £4,000.
Personally I am disappointed with the statement, there was no real statement of support to struggling households and small businesses. Today was an opportunity to instill confidence in the public and business owners, to let them know that the Government are willing to support us, but given the mere tax cut of 5p per litre on fuel, at a time when the Government are making significant tax earnings from the price hike falls way short of instilling that confidence.
Despite the fact that factories have been forced closed in Ukraine, once again disrupting the Car Manufacturing market, it was only retail and hospitality that receive a cut in business rates, forgetting all associated companies attached to this same sector.
One thing for sure is that we are all on a pathway for uncertain and challenging times so now is the perfect opportunity to look at ways where we can save, so keep an eye out for our cheap car lease deals, to reduce your monthly payment. The benefit of car leasing is that it's one fixed monthly payment, which helps you to budget. You can also include a maintenance package, to help you manage your budget further.