On 23 March, the Chancellor Rishi Sunak is scheduled to deliver the spring statement, which will be accompanied by the latest Office for Budget Responsibility (OBR) forecasts, that are released twice a year. The Budget will outline plans for tax adjustments, financial assistance, and an economic update. Industry requests and predictions will be included in Rishi Sunak’s March Spring Budget, as the UK’s recovery from the Covid-19 pandemic, the Ukraine crisis and rising living costs are all current issues. Predictions are as follows…

National Insurance

Business leaders have warned of the added burden that the 1.25 percent increase in National Insurance will bring. They are asking the Chancellor to cancel or postpone the planned hike, which they estimate will add more than £500 to the annual tax bill of a £50,000 salary.

VAT

The hospitality industries are urging the government to sustain the current VAT rate of 12.5 percent rather than raising it to 20 percent in April that it was before Covid-19. They claim that customers already hesitant to go out for treats as a result of rising household bills, so they do not need the added burden of increased VAT as well as a decline in revenue.

Fuel Duty

Hauliers have pushed the government to extend the freeze on fuel duty for another two years, claiming the record fuel prices are wiping out their profits. The Autumn Statement scrapped the scheduled increase in fuel duty due to pump prices being at their highest level in eight years. To minimise the effect on the logistics industry, the Road Haulage Association (RHA) has also urged ministers to postpone upcoming restrictions to the use of untaxed red fuel for 12 months. In recent weeks we have seen diesel prices reach £1.60 per litre on average, owing to surging oil prices caused by Russia’s invasion of Ukraine.

Research and Development

The Government have already indicated that they will refocus R&D relief on UK-based activities; it is believed that further measures will make the relief even more attractive, making all forms of R&D more cost-effective in the UK. There may even be proposals for a regional supplement to the rate of R&D in order to stimulate development in areas of the UK that require help to improve.

With all the uncertainty and issues the Chancellor will have to address, it will be interesting on how he plans to tackle them. For advice, get in touch with our team of experts at hello@bkplus.co.uk