On 23 March, Rishi Sunak announced his Spring Statement, against the backdrop of the war in Ukraine and a cost of living crisis that has seen many in the UK struggle to keep up with soaring prices.
The statement had some key points that directly affect businesses, so if you’re running a firm in the West Sussex or Kent region you’ll want to read on.
The statement was a real mixed bag for businesses. Most of the measures discussed were aimed at struggling households or workers. This makes sense due to the nature of the current crisis, but sadly doesn’t offer much in the style of the COVID-19 support packages that were provided back in 2020.
There are still some key points of interest for you, however. Let’s look at what these changes mean for your business.
Employment allowance
All small businesses throughout the West Sussex region will benefit from this particular measure.
As it stands at the moment, the employment allowance means small businesses with a National Insurance liability under £100,000 for the previous tax year can reduce their liability by up to £4,000.
This is now being increased to £5,000 saving all businesses £1,000 per year in National Insurance Contributions (NICs).
National Insurance increase
Speaking of National Insurance, the biggest tax talking point of the moment remains the 1.25% increase in NICs for employers and employees alike that was announced last September.
With a barrage of calls from the general public and the House of Commons to delay or scrap this change altogether, the Government remains steadfast in its NICs increase from April 2022.
Class 1 contributions, for employees, will rise from 12% to 13.25% and class 1a and 1b contributions, for employers, will rise from 13.8% to 15.05%.
However, Sunak announced in his spring statement that both employed and self-employed workers will see a change in the threshold at which they start to pay National Insurance.
This is rising from £9,880 to £12,570 from 6 July 2022. This could be a saving of up to £356 per year for a normal worker.
But for your small Kent-based business, this increase only applies to employees, meaning that employer contributions will still continue to be paid on salaries as before – over the £9,100 secondary threshold.
Energy costs and fuel duty
After the most recent analysis conducted by the Federation of Small Business (FSB), it was found that without any help from the Government, small businesses could face an increase of £10,000 in their gas and electricity bills.
The Spring Statement offered some support for this. With the current price of gas the highest it’s been for decades, Sunak announced a cut of 5p per litre on fuel duty.
While this is largely a targeted change for individuals and households, it will positively affect any business that uses road vehicles – so cabbies, couriers and food delivery will really see the benefit. The RAC thinks this change will cut about £3 off the average fuel tank fill-up.
How does this affect my business?
As a company in Kent or West Sussex, you’ll probably be well aware of the changes. But we can go a step further, helping you to navigate them financially.
If you need any support or advice, then don’t hesitate to give us a call. We’ll be more than happy to talk things through and find you the support you need.