Rishi Sunak has announced to cut fuel duty by 5 pence, to combat the rising energy, food and fuel prices, which is affecting the cost of living in U.K.
The Chancellor of the Exchequer, United Kingdom (U.K.) – Rishi Sunak has announced to cut fuel duty by 5 pence, to combat the rising energy, food and fuel prices, which is affecting the cost of living in U.K.
He also announced to raise the threshold for a payroll tax, a measure that amounts to a £ 330 (U.S. $ 435) annual tax cut for about 30 million people and reduce the basic rate of income tax from April 2024. The threshold at which workers start paying National Insurance from has been revised £ 9,600 to £ 12,570.
Referring to cut in fuel duty, Sunak tweeted,
It's 6pm – the biggest cut to all fuel duty rates ever has just come into effect. #SpringStatement2022 pic.twitter.com/zd16vQ7wRH
— Rishi Sunak (@RishiSunak) March 23, 2022
Taking it to twitter, the Prime Minister of U.K. – Boris Johnson tweeted,
In 2019 I promised to equalise National Insurance and Income Tax starting thresholds – today we deliver on that promise.
— Boris Johnson (@BorisJohnson) March 23, 2022
From July people can earn £12,570 a year without paying any tax – that's £330 more in people's pockets.#SpringStatement2022 https://t.co/9dPUaawqIv
However, Sunak resisted calls to scrap April’s National Insurance rise of 1.25 p in the pound. He said that U.K.’s recovery from pandemic has been slowed by the Russian invasion of Ukraine. U.K. has announced financial schemes for Britons accepting Ukrainian refugees. He stressed the full economic impact of Ukraine war is still not known.
Other measures announced by Sunak include reduction in Value Added tax (VAT) from 5% to zero on solar panels, heat pumps, roof insulation and other energy saving measures for 5 years. He also announced to increase the employment allowance from £ 4,000 to £ 5,000, allowing small businesses to reduce their National Insurance payments.
Organisations into green technology will be exempted from business rates from April, saving £ 35 million in 2022-23. Councils get another £ 500 million for the Household Support Fund from April, to help vulnerable households with rising living costs
The Office for Budget Responsibility, a non-departmental public body funded by the U.K. Treasury that provides independent economic forecasts and independent analysis of the public finances said that living standards are set to take the biggest hit since records began in the 1950s.
The forecasts showed growth will be 1.8% in 2023 and 2.1% in 2024. It said that inflation is set to peak at 8.7% at the end of this year and this, combined with rising taxes, will weigh heavily on living standards in the coming 12 months. The U.K.’s tax burden will be at the highest level since the 1940s.
