The economy: The UK economy is forecast to grow by 3.8% this year followed by 1.8% in 2023 (sharply down from previous predictions) and then 2.1% and 1.8% in the following two years.
- Inflation will average 7.4% this year before dropping to 4% in 2023 and 1.5% in 2024.
- The unemployment rate will be 4.5% this year, dropping to 4.0% next year and remaining stable at 4.1% for the next three years.
- Government debt will be 96.3% of GDP this year before slowly falling to 89.4% in 2026/27.
Fuel duty: From 6pm this evening (23 March 2022), the Government will reduce main rates of petrol and diesel by 5p per litre, and other rates proportionately for 12 months.
VAT: A VAT rate of 0% will be applied to energy-saving materials materials such as solar panels or heat pumps.
NB There was no announcement relating to retaining the 12.5% rate for tourism and hospitality; this will revert to the standard rate on 1 April 2022, a rise that industry bodies say will harm businesses.
National Insurance: The annual National Insurance Primary Threshold and Lower Profits Limit, for employees and the self-employed respectively, will increase from £9,880 to £12,570 from July 2022.
From April, self-employed individuals with profits between the Small Profits Threshold and Lower Profits Limit will not pay class 2 NICs.
Employment Allowance: From April, Employment Allowance will be increased from £4,000 to £5,000 As a result, businesses will be able to employ four full-time employees on the NLW without paying any employer NICs.
Income tax: The basic rate for personal tax will decrease from 20% to 19% from April 2024.
Green reliefs for business rates: In the Autumn Budget 2021, the Government announced the introduction of targeted business rate exemptions from 1 April 2023 until 31 March 2035 (England) for eligible plant and machinery used in onsite renewable energy generation and storage, and a 100% relief for eligible low-carbon heat networks with their own rates bill, to support the decarbonisation of non-domestic buildings.
The government is bringing forward the implementation of these measures – they will now take effect from April 2022.
Changing Places fund increased: A further £25.3 million has been allocated to install Changing Places toilets in public places and tourist hotspots.
R&D tax reform: From April 2023, all cloud computing costs associated with R&D, including storage, will qualify for relief.
Levelling Up Fund – Second Round: The government is launching the second round of the Levelling Up Fund and will publish a refreshed Prospectus, inviting bids from all eligible organisations.
Arms Length Bodies (ALB) review guidance: The government will publish guidance for a new series of reviews of ALBs (e.g. VisitBritain and VisitEngland). These reviews will scrutinise the work and effectiveness of particular ALBs, aiming to deliver savings for the taxpayer.