How the Spring Statement Affects Small Businesses

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How the Spring Statement Affects Small Businesses

Are you wondering how the Spring Statement 2022 will affect your small business? We’ve put together an insight into what the announcements will mean for Britain’s 5.5m small businesses. 


Chancellor Rishi Sunak has announced a package of measures to help businesses survive National Insurance payments and rising energy prices.

National Insurance

The National Insurance threshold is set to be lifted by £3,000 to £12,750. This change will raise the threshold in line with the point at which people begin paying income tax. This means over 30 million people will be £330 richer, with this change coming into place in July 2022.

The 1.25 per cent increase in National Insurance from April will actually be 2.5% for employed owners paying PAYE, because it applies to both employer and employee contributions.

The new National insurance threshold will particularly benefit low owners, who may have been left financially vulnerable after the pandemic.

So far, the Chancellor has only mentioned the effect on employed people, leaving questions over whether self-employed workers are impacted.

Fuel Duty

Fuel duty is set to be cut by 5p a litre, which is the biggest reduction in living history. This will last for a year and takes place immediately. This should reduce the cost of filling up an average tank by £3.30.

Income Tax

Rishi Sunak announced that the UK’s basic rate of income tax would be cut from 20 per cent to 19 per cent in 2024, resulting in a £5bn tax cut for more than 30 million people.

Employment Allowance

Employment allowance will increase from £4,000 to £5,000, ensuring a tax cut of up to £1,000 for 500,000 SMEs.

R&D Tax Credits

Research and development tax credits will be reformed, potentially making R&D expenditure credit more generous.

Business Rates

The Chancellor discussed the 50 per cent business rates discount for companies operating in the retail, leisure, and hospitality sectors, which comes into action on 1st April, but with a cap of £110,000 per organisation.

Business rates will be reassessed in 2023, taking into account rental values in 2021, which should see bills coming down for many in struggling sectors.

Are you a small business owner? Do you know how much it’s worth? Find out instantly for FREE with our online Valuation Tool.

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