The Spring Statement 2022 – Business Taxes

Spring Statement 2022 Business Taxes

On Wednesday 23rd March 2022, the Spring Statement was announced.

The statement included some key announcements which we go through below. It includes how the main items will affect businesses, and the taxes they will pay.

For information on how the Spring Statement 2022 will affect your personal taxes see Spring Statement 2022 Personal Taxes.

Business Tax announcements in the Spring Statement 2022

The main business tax announcements are below:

Has the corporation tax rate increased?

The corporation tax rate is to remain at 19% for another year.

Unfortunately, from April 2023 the rate of corporation tax is to increase to 25%.

The rate will remain at 19% for profits under £50,000. Profits between £50,001 and £250,000 will be taxed at an effective rate of 26.5%.

Use our Corporation Tax Calculator to see how much extra tax you will pay.

What capital allowances are available on assets purchased?

Qualifying expenditure purchased between 1 April 2021 and 31 March 2023 can obtain a 130% super deduction. Find out more on the super deduction.

The annual investment allowance is available for businesses investing up to £1 million. This is set to reduce back down to £200,000 from 1 April 2023.

How much is the employment allowance on employers NI?

The employment allowance is a reduction in the employers NI liability.

The allowance is to increase to £5,000 in the tax year 2022/23. The employment allowance in tax year 2020/21 is £4,000.

Not all businesses can claim the employment allowance. Find out more on the employment allowance.

Were there any VAT announcements?

The temporary VAT reduction to 12.5% for tourism and hospitality will end on 30th March 2022. The rate will revert back to the standard rate of 20%.

VAT on energy saving materials will reduce to zero rated from April 2022. For example this will apply to solar panel installations.

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