Luke Guinan from our Corporate & Commercial team highlights key areas for businesses to be aware of following today’s announcement.
The Chancellor of the Exchequer, Rishi Sunak’s, statement in the House of Commons today was dominated by the impact on the economy caused by the Pandemic, the war in Ukraine and the release of figures which revealed inflation had hit a 30-year high of 6.2% in the twelve months up to February.
Correspondingly, the Chancellor’s statement was primarily focused on households and the rising cost of living. The statement’s headline points were a fuel duty cut by 5 pence per litre effective from 18:00 tonight until March 2023, an increase to the income threshold for National Insurance to £12,570 to take effect in July 2022 and a pledge to reduce the rate of income tax from 20p to 19p in 2024.
For businesses, the key announcements were that the retail, hospitality and leisure sectors will have a 50% discount in business rates up to a limit of £110,000, and that the Employment Allowance will increase from £4,000 to £5,000 from April 2022 to provide smaller businesses with some relief from National Insurance payments.
Overall, the Chancellor’s statement noted difficult immediate financial straits, but with an optimistic look down the line that the Office for Budget Responsibility forecasts an increase in the economy’s rate of growth and stabilisation of inflation.