
The economy and fiscal forecasts
- The economy’s growth expectation has been revised down to 3.8% in 2022 and is then expected to increase by 1.8% in 2023, 2.1% in 2024, 1.8% in 2025 and 1.7% in 2026.
- Inflation has risen at a faster rate than originally forecast, reaching 6.2% in February and expected to average at 7.4% for 2022.
- Debt is predicted to be at 83.5% of GDP in 2022/23 and fall to 79.8% in 2026/27.
- Unemployment is currently at 3.9% which is lower than predicted and forecast to reduce each year going forward.
Taxes and duties
- The increase of 1.25% in National Insurance (both employee and employer) as well as in the Dividend Tax rates, which have been confirmed, will happen from 6 April 2022.
- Fuel duty will be cut by 5p per litre until March 2023.
- From April 2022, the Employment Allowance will increase from £4,000 to £5,000 per year, meaning an additional saving for businesses that employ staff.
- From July 2022, the National Insurance threshold for employees will be increased so that it matches the Personal Allowance of £12,570. This is the threshold where employees start to pay tax.
- While business rates will continue, from April 2022 there will be a 50% business rates relief for companies in the retail, hospitality and leisure sectors over the next five years.
- The Annual Investment Allowance (AIA) of £1 million will be extended to March 2023.
- VAT will be reduced to zero for five years on energy efficient measures such as solar panels, heat pumps or insulations.
- By 2024 the basic rate of income tax will be cut from 20% to 19%