2022 Spring Statement Special 💷
💼 All the relevant Spring Statement announcements for SMEs, including energy, fuel duty, National Insurance contributions, business rates, income tax, VAT, and training schemes.
🦾 G O
💼 2022 Spring Statement for SMEs
Bionic rounds up the most relevant bits of the 2022 Spring Statement so you know exactly what to expect.
We’re just reporting the facts, we’ll leave it up to you to decide whether the Chancellor’s plans go far enough. You can read more on the announcements at our blog - Spring Statement round-up for busy business owners.
💡 Energy
No support has been offered to business owners facing spiralling energy costs. Switching to a better-priced fixed rate deal before the end of your current contract is still the only way to beat rising energy costs.
To get a quote, give the business energy experts at Bionic a call now on 0800 860 6833.
⛽ Fuel duty
Fuel duty will be cut by 5p per litre from 6 pm tonight (March 23) and will be in place for the next 12 months. This is the biggest ever cut in fuel duty rates and is a tax cut worth over £5 billion.
🤒 National Insurance Contributions
The increase in National Insurance Contributions (NICs) will go ahead as planned. But from July, the NICs threshold will increase by £3,000 to fall in line with the Income Tax threshold.
This means that employees won't pay anything in NICs until they're earning £12,570 a year. This works out as a tax cut of around £330 per year for employees and will offset the NIC increase for anyone earning less than £35,000 a year.
As an employer, you will still pay NICs at a rate of 15.05% (up from 13.80%) for all employees that earn more than £8,840 per year (excluding those aged 21 or under and apprentices aged 25 or under).
But this might be offset by the Employment Allowance being raised to £5,000 in April. This means eligible employers can cut their employer NICs bills by up to £5,000 per year, a tax cut worth up to £1,000 per employer.
But if you’re self-employed workers and pay "Class 4" rates, you won’t benefit from a threshold increase and will still pay 10.5% on earnings above £9,568 from April.
📨 S U B S C R I B E
Subscribe to The Backbone to get each fortnightly edition into your inbox at 7 am every other Friday. Perfect for a quick read at breakfast or on the commute.
🏪 Business rates
Business rates are a tax on property used for business purposes, such as offices, shops, pubs, and warehouses. Check out the government website for more information on business rates.
The planned business rates reduction will kick in from April. This means any business in the retail, hospitality and leisure industry will get a 50% cut in their business rates, up to £110,000.
This could see hundreds of thousands of small businesses across the UK save thousands of pounds. A typical pub will save around £5,000 a year.
📈 Business training, innovation, taxes and investment allowances
The Research and Development tax credit scheme will be reformed to include data, cloud computing, and pure mathematics projects. This is a type of Corporation Tax relief for businesses that work on innovative projects in science and technology.
Business investment tax rates will be cut from autumn and the annual investment allowance, which means you can deduct the full value of any qualifying item from your profits before tax, will be increased to £1 million.
The Chancellor also pointed out that small businesses can get help from a number of Help to Grow schemes:
The Help to Grow management scheme offers a mini MBA that is 90% funded by the government. This benefit can work out at several £1,000s.
The Help to Grow digital scheme offers a 50% discount on software up to the value of £5,000.
💸 Income Tax
Income tax will stay at 20% but the Chancellor pledged to cut it to 19% by 2024 (probably in time for the next general election).
📈 VAT
As planned, the standard VAT rates of 20% will return from April 1, 2022. The rate was cut to 5% on July 14, 2020, then was increased to 12.5% from October 1, 2021.
📊 B U S I N E S S
Get your business costs sorted 💷
Our tech-enabled team will answer all your questions in simple terms, and help you find the best deal on business energy, insurance, phone, broadband, or finance. No jargon. No-fuss. #BeABionicBusiness 🦾
🔥 H A S H T A G
If you want to hear more from us, check out our Twitter, Facebook, Instagram, and LinkedIn feeds.
Get involved by using the hashtags #BeABionicBusiness and #BionicBusinessStory.
📩 J O I N
Get involved with our business community 🗣
Share your thoughts and tips to give other busy business owners a helping hand. Or ask a question to see if anyone can help you out.
We’ll be back with Issue #29 of The Backbone on Friday, April 2 ☔