Against a backdrop of rising inflation, Chancellor Rishi Sunak presented his first Spring Statement on Wednesday 23 March 2022.
In his Spring Statement, the Chancellor announced a cut in fuel duty for petrol and diesel as he sought to ease the impact of rising prices for households and businesses. The Chancellor will lift the starting thresholds for National Insurance contributions (NICs). He also pledged a cut to income tax in 2024. However, the Health and Social Care Levy will still be implemented in April 2022. For businesses, there is an increase to the Employment Allowance, as well as relief from business rates on a range of green technologies and help with training and the adoption of digital technology.
According to Gemma Thake, a Director in the Tax team at Price Bailey, R&D tax relief was also a key feature of the Spring Statement for companies. It was announced that relief would be extended from April 2023 to cover R&D underpinned by pure mathematics, which is likely to be of particular interest to emerging sectors such as AI and robotics, as well as established businesses in manufacturing and design. Other “reforms” were also confirmed to extend the definition of qualifying expenditure to include all cloud costs associated with R&D and restrict R&D costs incurred overseas, unless there is a material or regulatory exception. Draft legislation is expected to be published this summer.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.