THE Chancellor unveiled his budget plans for the year ahead with his spring statement last week (Wednesday 23 March).
Rishi Sunak unveiled several measures to tackle the cost of living crisis, including the threshold at which people start paying national insurance and a 5p cut in fuel taxes.
Mr Sunak said the measures will ‘put billions back in the pockets of people across the UK and deliver the biggest net reduction in personal tax for over a quarter of a century’.
But business experts at Tunbridge Wells offered a colder response to the spring statement.
Neill Thomas, Partner and Managing Director of Thomas Mansfield Solicitors, said: “On the face of it, the Spring Statement was a sign of encouragement, but as usual what he gave with one hand he took over from the other.
“While the increase in Employment Allowance from £4,000 to £5,000 has been welcome as it means eligible employers will be able to reduce their Employer National Insurance Contribution bills by up to 5 £000 a year there was no news on corporate rate reform, which has long been the bane of small business, and which contributes to rising overheads at a time when shops and offices are still far from being fully utilized.
“There was also no news regarding aid for the leisure industry. Pubs and restaurants are trying to bring customers back to recover some of their losses due to closure during Covid, but April 1 will be hit by the reintroduction of the standard 20% VAT rate on food, which had been temporarily reduced at 12.5%. ”
Darren Austin of accounting firm Synergee said the Chancellor was facing a “perfect storm” but the statement lacked “substance”.
“Rishi Sunak had little wiggle room in the spring statement. The cost of supporting the country over the past two years of the pandemic has left the coffers bare,” he said.
“Furthermore, the fuel crisis and inflation are a perfect storm, with the Office for Budget Responsibility predicting the biggest real hit to household income since comparable records began in the 1950s.
“Mr Sunak is a conservative and believes in low taxes, but we currently have a significantly high overall tax burden, with the spring declaration doing little to change that.
“On the positive side, the threshold at which employees and the self-employed will start paying National Insurance (NI) has increased.”
He continued: ‘Overall a confident statement but with little real substance to ameliorate the cost of living issues that are currently occurring.’