Many people will have heard the Chancellor’s announcement. Cost of living pressures are rising, and several measures may affect households and businesses. Here are five areas to watch.
- NI threshold / allowance: The NI threshold rises from £9,568 to £12,570 from July 2022. For earnings up to £12,570, this can increase take-home pay. The impact varies by income level, and higher earners may see different effects later in the year.
- Income tax: The basic rate is planned to reduce from 20% to 19% from April 2024. This reduces tax slightly for earnings above the personal allowance.
- Pensions: A lower basic rate can reduce the value of pension tax relief for some contributions (because relief is linked to the rate).
- Fuel duty: Fuel duty remains frozen and the 5p reduction continues for the next tax year.
- Employment Allowance: Increases from £4,000 to £5,000 from April, helping eligible employers reduce their employer National Insurance bill.
