What can we expect from the Spring Statement?
I’m not usually short of words but have found it particularly difficult to pull together my thoughts regarding the forthcoming Spring Statement.
The harrowing pictures of the conflict in Ukraine have quite rightly placed UK PLC issues into perspective and there may well be many of us that have totally forgotten that the Chancellor is due to deliver his latest statement on 23 March 2022.
However, Rishi Sunak is under challenge from all parties as the tax burden is higher under his stewardship than it has been for many years and, as such, rather than increase taxes to repay the Covid debt burden, he should instead use the Spring Statement as a positive opportunity to:
- address the triple whammy of inflation soaring to a 30-year high, fiscal drag from frozen tax allowances and National Insurance increases from April.
- introduce specific measures targeted on reducing the impact of the exponential increases on fuel costs. The Chancellor could for example look to temporarily reduce the 20% green fuel levy and 5% VAT rate.
- alternatively, he could even look to remove these levies from fuel bills altogether and include them in general taxation instead. Reducing VAT and green levies in this way could save up to £400 on an average household’s annual fuel costs.
- introduce measures focused on enabling Charities to deliver humanitarian aid quickly and with minimal administration burden or cost.
- extending the super-deduction of 130% tax relief on qualifying capital expenditure to ensure that businesses continue to invest despite the Global uncertainty.
- to defer or remove the proposed increase in corporation tax to 25% from April 2023 to lessen the impact of taxation on businesses at a time when supply costs are under significant pressure.
If he can manage to deal with all of the above then I think that the majority of us would view the Spring Statement with renewed interest and perhaps as a job done well – only time will tell.