The Heritage Alliance team has worked to summarise the Chancellor’s Spring Statement, highlighting key changes for the heritage sector.
On 23 March, the Chancellor of the Exchequer presented the Spring Statement to the House of Commons. He had announced changes to the tax system and new spending commitments, some of which will have an impact for the heritage sector.
Alongside the statement, the Office for Budget Responsibility (OBR) published revised forecasts for the economy and the public finances.
The Government noted that the spring statement took place against the backdrop of the Russian invasion of Ukraine and the sanctions imposed on Russia by the UK and its allies. The Government argued these factors “will inevitably have an adverse effect on the UK economy”. In particular, they are causing rises in inflation, particularly through the cost of domestic energy and motor fuel and increases in economic uncertainty.
Alongside the budget, the Government published a “tax plan”. The chancellor said this sets out how the Government intends to use the tax system over the remainder of the parliament to help families with the cost of living crisis; boost business investment, productivity and growth; let people keep more of what they earn. As part of these three aims, the Chancellor announced that he intended to cut and reform taxes on business investment, following consultation with the sector, and that plans would be announced in the Autumn Budget. He also announced that there would be a 1% cut on income tax in April 2024.
Key Announcements from the Spring Statement
Fuel Duty – From 6pm on Wednesday 23rd March, fuel duty was cut by 5p a litre. This is a temporary measure for this financial year.
Employment Allowance – This tax relief, which allows eligible businesses to reduce their National Insurance contributions, will be increased £4,000 to £5,000
Business rates exemption / relief for Green technology – producers of green technologies will be exempt from business rates from April 2022.
Income Tax reduction – From April 2024, income tax will be reduced from 20% to 19%. This will have a knock-on effect for Gift Aid, and those who receive it. To help charities prepare for this new rate, there will be a three year transition period, which will effectively maintain what charities can claim from the tax relief at similar levels in the short term.