Another helpful tax cut was to reduce the 5% VAT charge on insulation materials, solar panels, heat pumps and so on down to 0%. VAT registered traders will absorb these changes, but will this be sufficient to encourage the population to invest in what are still generally expensive green energy solutions?
While the incoming Social Care Levy will remain, he announced that the national insurance contributions (NICs) threshold would be increase by £3,000 to bring the income tax and NIC thresholds in line. This has been speculated about for many years, so is welcomed, but taken with the increased NIC from the Social Levy, the real impact is likely to be minimal. It’s also note-worthy that this will only apply from July 2022, and NICs are not cumulative, so unless things change, there will be no adjustment made from April to when this takes effect.