Last week, Chancellor Rishi Sunak delivered the Spring Budget 2022 to the commons and as expected, it’s been widely reported on.

Amid rising inflation and cost of living, some of the points highlighted in his statement were highly anticipated – many had already speculated what Sunak would announce and hoped for good news to alleviate some of the financial burden put upon the British public.

But was everything announced really that supportive? And what does it really mean for businesses?

Let’s take a look.

National Insurance Contributions… To rise or not to rise?

There have been many calls for the chancellor to scrap the increase in National Insurance and Dividend Tax that was planned to be implemented from April 2022.

However, in the Spring Budget 2022, Sunak actually announced that the plan to increase both taxes by 1.25% points will still go ahead. And, it’s on track to become the norm as The Health and Social Care Levy at some point in 2023.

National Insurance wasn’t completely left out of the statement though, with Sunak announcing that the threshold for Class 1 and 4 National Insurance will increase from April 2022.
This means that the threshold for National Insurance Contributions will be £12,570, in line with the Income Tax Threshold – a slight improvement for employees.

Fuel Crisis help

Sunak acknowledged the rising cost of fuel in the Spring Budget 2022 and announced that the fuel duty will be cut by 5p per litre until March 2023.

Whilst this has been announced to help alleviate the cost of fuel that is ever rising, experts have warned that this will only help the British public if gas retailers do not use it as an opportunity to make more profit on the fuel – keeping costs high. We for one would like to see some regulations in place to ensure this doesn’t happen.

VAT for energy efficient equipment

Perhaps the most talked about announcement following the budget; homeowners installing energy efficiency materials such as solar panels, heat pumps, or insulation will see VAT cut on these items from 5% to zero for the next five years.

Support for businesses

Much of the statement focused on the cost of living and therefore was more relevant to personal income as opposed to businesses. However, Sunak gave certain insights into his plan for continuing to help businesses out of the unprecedented times they have faced.

The Chancellor announced that the employment allowance will be increased to £5,000 from April, up from £4,000. This will help businesses and sole traders with one or more employees who are liable for Class 1 National Insurance Contributions, in the hope of alleviating business owners’ rising liabilities. We’d certainly have appreciated additional measures being introduced for our clients. But perhaps the future holds further announcements?

Looking to the future

The Spring Budget 2022 put a greater emphasis on deferred plans set to take effect from Autumn, as opposed to this April. This suggests we must keep looking forward and hope that further opportunities and support will arise for businesses.

In other positive news, Sunak did announce his plan to cut income tax by 2024. The plan would cut the basic rate income tax to 19%, down from 20%. Whilst this appears to be a minimum cut, it could benefit 30 million people who could each save £175.

Furthermore, Sunak announced his intention to overhaul the Research and Development credits to help create a “new culture of enterprise”. The plans will seek to help incentivise UK businesses to innovate in a more globally appealing manner. Moving forward, data, cloud computing and pure maths will be eligible within the schemes. Again, this change is most likely to come into effect following the Autumn Budget.

Our reaction

As expected, the NI hike from April 2022 will be implemented however the impact will be largely offset by the increase in the NI threshold. This will mean that anyone earning less than £35k per year will pay less NI – which is around 70% of workers.

Those who earn more will see a tax rise, albeit smaller than expected. Employees earning £20k per year will see an NI cut of £180 instead of an increase of £90, which is positive.

Unfortunately, this relief does not extend to employers, whose payroll costs will increase by 1.25% of all salaries over £9,100 at a time when they are already struggling with labour shortages and wage inflation, raw material price inflation and the escalating cost of energy.

The 1% reduction in the basic rate of income tax before the end of Parliament, in our view, is largely political. There are several variables that need to land safely before this will be substantively enacted.

There will be significant additional spend on HMRC compliance activity, targeted in particular towards large and medium sized businesses. This is projected to raise £3 billion in extra tax over a 5-year period. However, under the badge of simplification and fairness, a review will be undertaken of tax reliefs and allowances – the implication being that some of these may be abolished. As a firm, we were not expecting any changes to the capital gains tax regime, but we were aware that a number of people were concerned about it. Fortunately, the 20% capital gains tax rate and the £1m Business Asset Disposal Relief limit remain intact for now, although this could be one of the reliefs that is ‘reformed’ to pay for the income tax cut in 2024.

Final thoughts

We know the immense pressure that businesses are under right now, especially amid the ongoing and upcoming changes.

The Spring Statement may not have been delivered with the business owner in mind, but with Sunak’s future plans outlined, we can continue to plan for the future with hope that support is on the horizon.

As always, if you require any support with these upcoming changes, do not hesitate to contact us at

In honour of International Women’s Day, we spoke to Simone Lewis, a wonderful accountant at our Leeds office.

Simone shares her thoughts on what International Women’s day means to her.

“To me personally, International Women’s Day is a day that celebrates women who have overcome prejudice and achieved their ambitions, whilst also bringing into the open these issues on a wider platform – both inside and outside of the workplace.”

What are your career ambitions?

I have wanted to be an accountant since I was 14 years old. The thing is, as I grew up and told people of my ambitions, they always looked at me in surprise. What is most surprising is that people still look at me like that now. Although it does not happen as often, I have always wondered whether it’s due to my gender.

How did you overcome barriers to get into accounting?

I did not take the ‘traditional’ path into accounting. I have worked within the profession since I was 16 years old – although for a while away from practice – but it was not until I was 31 years old, that I had the courage to start working towards my goals. By this time, I was married and had two children – the youngest being 10 months old. I worked full time and went to college after work twice a week to study.

It was very difficult at times, trying to juggle everything. But, because it’s what I wanted to do, I kept pushing and studying – knowing that it would all be worth it.

There were many times people told me to give up. How can a mother have the time to work, look after children, AND study? Would they have said the same if I was a man? I honestly don’t think they would have. I qualified in 2005, proud not only of my achievements but that I rose above those who doubted me and followed my dream rather than their poor advice.

How is it for you now?

It was all about finding the right company. Shenward is genuinely the best place that I have ever worked – I promise I have not been paid to say that!

When I started at Shenward, I was responsible for basic bookkeeping and accounts, and since then I have progressed massively within the company.

Unfortunately, many women are still overlooked when it comes to promotion, despite being ideal for the role. There is a particular stereotype in the financial industry: that it is a man’s game, but this could not be further from the truth.

I am lucky to work for a company that credits hard work and expertise. I am now the lead regarding self-assessments at our Leeds office. The truth is, in many other workplaces I may not have risen as I have at Shenward, not because of my lack of experience, but because of my gender.

I have worked for companies where I was never given the chance to progress, and what’s worse is that given my age in many other companies I certainly would be overlooked now. I am a woman of a certain age, but that does not mean I cannot exceed expectations! My age is a testament to my experience, not a ticking clock. Shenward recognises talent for what it is. I know when anyone is offered a role or promotion, it is because they are brilliant at what they do. That is a credit to our leadership, who help and encourage employees at all levels to reach their potential and progress in their field.

What message would you give to others?

The fact that I have progressed so much in this profession is an achievement in itself, and proof not only that hard work pays off, but that hard work will be recognised for what it is – by the right people.

There is one thing I would like to get across to all women, no matter their career, or path: No matter what your ambition is, never give up. I know how difficult it can be, but you can achieve your aims if you surround yourself with the right people.