As part of his Spring Statement 2022, Chancellor Rishi Sunak revealed a three-part Tax Plan to cover the remainder of the Parliament. The three elements of the plan are:
1. Cost of Living
The Spring Statement formed the first part of the plan – setting out further steps to ‘help working families and support businesses’ – including:
2. Capital, People, Ideas
The second part of the plan focuses on creating the right conditions for private sector led prosperity through growth and productivity. The government is investing £600bn over the next five years and is keen to get businesses to invest more as well. The government intends to engage with businesses over the remainder of 2022 to find the most effective way to cut and reform taxes on business investment – conclusions will be announced in the Autumn Budget
3. Sharing Growth
In a tax break worth over £5bn a year, the final part of the Tax Plan, entitled ‘Sharing Growth’, confirms a cut in the basic rate of Income Tax from 20% to 19% in England, Wales and Northern Ireland in 2024. The Scottish government will receive their share of this funding which can be used to cut taxes or increase spending.
As part of the Tax Plan, the Chancellor has reaffirmed plans for tax reform to make the tax system ‘simpler, fairer and more efficient.’ This will be done by continuing the review of over 1,000 tax reliefs and allowances in the tax system by 2024.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from taxation, are subject to change. The Financial Conduct Authority does not regulate tax planning.