The Chancellor, Rishi Sunak, delivered his speech in Parliament on Wednesday for the Spring Budget. While on the other side of the globe the UK is putting sanctions on Russia for their invasion of Ukraine, back home the sanctions are affecting the cost of living.
A support for businesses
Impacted by the pandemic and the war in Ukraine, the government has tried to provide a plan to help businesses. Sunak pledged that the government will reform the generosity of tax credits for the money private firms spend on research and development. He also said the government will cut tax rates on business investment. The details are to be set out at the Budget in the autumn. He said the Employment Allowance will increase to £5,000. Sunak claimed it is a tax cut worth up to £1,000 for half a million small businesses.
Impact on the cost of living
Yesterday, the chancellor announced that the government will raise the threshold people earn before they pay National Insurance. « From this July, people will be able to earn £12,570 a year without paying a single penny of income tax or National Insurance. » That’s a £6bn personal tax cut for 30 million people across the United Kingdom.
One of the big announcements from Rishi Sunak was that the fuel duty cut by 5p. It was described as “the biggest cut in all fuel duty rates ever”. The cut started yesterday at 6pm and will last until the end of next march. Also, for the next five years, homeowners will pay 0% VAT on energy saving materials, such as solar panels. In his final announcement, he said that before the end of this Parliament in 2024, the basic rate of income tax will be cut from 20p to 19p in the pound.
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