In his announcement, Mr Sunak unveiled an increase to the Employment Allowance – a relief which enables smaller businesses to reduce their employers National Insurance contributions bills each year – from £4,000 to £5,000 starting from 6 April. This measure aims to partially offset the National Insurance hike, which is set to go ahead as previously planned. This news comes on top of 50% business rates relief for eligible retail, hospitality, and leisure properties being introduced this April.
Our summary
Last October, when Chancellor Rishi Sunak announced his Autumn Budget, the sentiment of his announcement was one of optimism, as the country emerged from the worst of the pandemic and looked to a brighter future. Fast forward to March and the tone of his Spring Statement is starkly different.
Prefaced with somewhat premature warnings that the war in Ukraine would impact the UK economy significantly for years to come, and reminders that The Office for Budget Responsibility (OBR) is still a long way off recovering from pandemic spending, the Spring Statement didn’t instill optimism or inspiration for business owners.
With immense pressure on businesses and individuals to cope with increased costs of energy and fuel that pushed inflation to a 30-year high on the morning of the Chancellor’s announcement, what was needed from the ‘mini-budget’ was a significant relief package, widely suggested to include a backtrack on National Insurance increases.