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Spring Statement: March 2022


The Spring Statement was announced on Wednesday 24th March 2022, the primary focus of which centred around measures to help those hit hardest by the rising cost of living.

Whilst the Chancellor has continued with the raise in the rate of National Insurance and dividends by 1.25%, he has countered some of the impact by raising the threshold at which National Insurance becomes payable. In addition, he announced that there will be a 1% cut to the basic rate of income tax from April 2024 (England, Wales & NI only).

More on that below, firstly, here’s a reminder of what we knew already, that the majority of allowances have been frozen until April 2026. This includes:

Income Tax allowances/thresholds:

Personal allowance – £12,570

Higher rate threshold – £50,270 (England, Wales & NI) / £43,662 (Scotland)

Capital Gains Tax: £12,300

Dividend Allowance: £2,000

Inheritance Tax:

Nil Rate Band – £325,000

Residence Nil Rate Band – £175,000

Corporation Tax: 

Set to rise to 25% from April 2023

Small companies with profits below £50,000 will continue at 19%

Reintroduction of tapering relief for businesses with profits under £250,000

Pension Lifetime Allowance: £1,073,100

With inflation expected to remain high, it is more important than ever to efficiently utilise your available allowances. If you would like to discuss further, please do get in touch with Val or Claire.

Now turning to the changes announced in the Spring Statement:

Income Tax

Earnings and savings: In England, Wales and Northern Ireland, the basic rate of income tax will fall from 20% to 19% from April 2024. This will apply to both non-savings and savings income. The Scottish Government will decide on the rates in Scotland from 2024 but will be supported by additional funding.

Dividends: It was confirmed that the rate of tax for dividends will increase by 1.25%. This will mean the new dividends rates for individuals will be 8.75% (basic), 33.75% (higher) and 39.35% (additional).

National Insurance

The increase to NI of 1.25% will go ahead as planned. This will be added to the rates of NI for 2022/23 for employees, employers and the self-employed.

It is intended that the 1.25% rise will become a separate standalone levy from 2023/24. The thresholds at which individuals will start to pay National Insurance (NI) will be brought in line with the annual personal allowance of £12,570. This will happen from July 2022 and applies to both employees and the self-employed.

Effectively anyone earning approximately £34,000 and below will pay less National Insurance than in 2021/22. Whilst the change benefits those on lower incomes its positive effect is felt most for middle-income households.

From April the self-employed will not have to pay class 2 flat rate NI contributions if their profits are below £9,880, with the lower profits limit rising to £12,570 from July.

Should you wish to discuss any of these changes, please contact Val or Claire, to discuss further.

What our clients say

I would like to thank EBS and their staff for providing an excellent service, making the minefield of my various pensions seem like an easy task and for keeping me updated on the progress. I would not hesitate in recommending them to anyone looking for pension advice.

Trust and expertise were my key needs for re-establishing my financial portfolio following a divorce. The replacement life cover and complete evaluation of my pension goals were perfectly designed and implemented to suit my changed circumstances. Well done EBS!

Honest and comprehensive financial advice given with no pressure to buy any products. Reasonable fees for advice and ongoing costs. Very happy with the services given.

Many thanks for taking so much time to meet and discuss our retirement funding plans with us yesterday. The detail of the analysis was very impressive, and you and your staff are to be congratulated on a very professional job.

Our grateful acknowledgements are due for the advice and support proffered by the EBS team and everyone we met at entry, all very courteous, personable and a pleasure to meet.

The ‘Portfolio Report’ that EBS offers has made understanding and managing the family budget so much simpler. It gives a detailed summary and breakdown of our overall financial position, which is so helpful when cross-referencing it.

Thank you for your very comprehensive letter and schedules.... I must reiterate my thanks for all you have done for me.

Many thanks indeed to you and EBS for doing your very best for me. I know I am in safe hands with you. It really is very much appreciated!

I would also like to thank you all for the work in getting this organised for us. I know it has not been easy but I really appreciate it all.

FR, Lanark

JS, Glasgow

IM, Dunbartonshire

RS, Biggar

BW, Skelmorie

MP, Glasgow

BA, Salisbury

MR, Glasgow

NM, Glasgow

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