23 March is the date set for the mid-year Spring Statement, being delivered by the chancellor Rishi Sunak.
What, if anything, can we expect?
UK families are facing the worst cost-of-living crisis for decades and we need Rishi to do more to help, and not just those on benefits. The forgotten employed that are earning “just enough” but don’t qualify for benefits.
It appears that he is under pressure to abandon the 1.25% increase to NI rates but realistically, if spent in the right way, is needed by the NHS. I’m skeptical that it will be spent increasing the number of doctors and nurses because we have under invested in education for those job roles for as long as I can remember. Let’s just hope that if the increase goes ahead, it won’t be spent on the CEO of your local hospitals golf membership.
Rishi isn’t due to make changes to other taxes as that is normally dealt with by the Autumn Budget, but he has been known to make some changes during the sprint statement. Fingers crossed that any changes he does make is a benefit to the wider UK population and not the mega-rich.
What would I like to see happen?
I’m aware that any borrowing we make as a nation as to be paid back but as we appear to have borrowed £129.3 billion less in April to December 2021, significantly less than the previous year, maybe Rishi needs to consider borrowing to ease the burden on the UK population.
Personally, if my cost of living is going up, I want more in my pay packet and therefore more available to spend on the high street.
- Increasing the personal allowance
Just a small increase to £13,000 per annum will give someone earning £20,000 a year an extra £100 a year in their pay packet. Small different, yes, huge difference when you’re only just earning enough to survive.
- Postpone the Health and Social Care Levy
I have already said that the NHS needs this extra money, and I am not disputing it, BUT there is a lot of wastage already in the NHS. Funds are already being spent in the wrong places. Addressing those wastages and delaying the levy would be a massive leap forward. I hate the thought of throwing money at a problem, knowing it won’t actually solve the issues. Postponing the levy will see the average employee holding on to approx. £180 a year.
- Reduce VAT to 17.5%
VAT on hospitality and tourism is due to revert to 20% from 1 April 2022 which is an increase of 7.5%, a bit of a jump. I’d like to see VAT reduced across the board to 17.5%, that way we can all spend the £280 we’ve saved above on a few luxuries and let’s be honest we could all do with it.
“This is a once-in-a-generation crisis, and the government must step up to help struggling households and businesses on the brink. Instead of clobbering struggling families with a tax hike, the Chancellor should be putting money back into their pockets.” – Ed Davey, The Liberal Democrats
- Abolish VAT on energy
I have read so many articles telling me that abolishing the 5% VAT on fuel is the wrong thing to do and mathematically I agree. However, most people don’t live in a mathematical world, they live in the real world, with real cash-flow issues and with real decisions to make, eat or heat?
With the increase on the energy price cap coming in to force in April and October, we’re all worried about the increase to our bills. Giving us a VAT break for the next year will alleviate that worry for so many households.
A little reminder of the tax changes coming up as announced in the Autumn Budget
- Annual Investment Allowance – £1m allowance is to be extended to 31 March 2023
- Personal Allowance – limits have been frozen to £12,570, £37,700 and £150,000 until April 2026
- Health and Social Care Levy and Dividend Rate – levy introduced and dividend tax rise of 1.25%
- National Living Wage – increased to £9.50 per hour
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