News – Tax Plan
Chancellor unveils new Tax Plan to ease the rising cost of living
- Chancellor announces tax cut for nearly 30 million UK workers through rise in National Insurance thresholds
- Cut will save the typical employee over £330 in the year from July
- Spring Statement also sets out measures to boost investment, innovation, and growth – including a £1,000 increase to Employment Allowance to benefit around half a million SMEs
Rishi Sunak announced that National Insurance starting thresholds will rise to £12,570 from July, meaning hard-working people across the UK will keep more of what they earn before they start paying personal taxes.
The cut, worth over £6 billion, will benefit almost 30 million working people with a typical employee saving over £330 in the year from July.
Sunak also announced that fuel duty for petrol and diesel will be cut by 5p per litre from 6pm tonight (March 23) to help drivers across the UK with rising costs – a tax cut worth £2.4 billion. This is the biggest cut ever on all fuel duty rates and means a one-car family will now save on average £100.
To let people keep more of what they earn, the basic rate of income tax will also be cut by 1p in the pound in 2024, when the OBR expect inflation to be back under control, debt falling sustainably and the economy growing. The cut is worth £5 billion for workers, savers and pensioners and will be the first cut to the basic rate in 16 years.
The Chancellor also set out a series of measures to help businesses boost investment, innovation, and growth – including a £1,000 increase to Employment Allowance to benefit around half a million smaller firms.
Delivering the Spring Statement, Chancellor Rishi Sunak said:
“This statement puts billions back into the pockets of people across the UK and delivers the biggest net cut to personal taxes in over a quarter of a century.
“Like our actions against Russia, I have been able to do this because of our strong economy and the difficult but responsible decisions I have had to make to rebuild our finances following the pandemic.
“Cutting taxes means people have immediate help with the rising cost of living, businesses have better conditions to invest and grow tomorrow, and people keep more of what they earn for years to come.”
Delivering the statement, the Chancellor made clear that sanctions against Russia will not be cost-free for people at home, and that Putin’s invasion presents a risk to our economic recovery – as it does to countries all around the world.
However, announcing the further measures to help people deal with rising costs, he said the extra support could only be provided because of the UK’s strong economy and the tough but responsible decisions taken to rebuild our fiscal resilience.
The immediate help for people with the cost of living and support for businesses comes as part of a wider Tax Plan announced by the Chancellor that will also create better conditions for growth and will share proceeds from growth more fairly – ensuring people can keep more of what they earn.
Help with the cost of living
The Chancellor said that global supply chain issues following the pandemic, as well as Russia’s invasion of Ukraine, are driving up the cost of living for families across the UK.
To combat this, he announced that from 6pm this evening fuel duty will be cut by 5p per litre for 12 months – worth £2.4 billion for hard-working families across the UK.
To ease cost of living pressures for almost 30 million employees, the Chancellor announced that from July 2022, National Insurance thresholds will rise to £12,570 to align with the income tax personal allowance. This simplification means that, from July, 70% of workers who pay NICs will pay less of it, even after accounting for the Health and Social Care Levy. Of those who benefit from the threshold increase, 2.2 million people will be taken out of paying NICs altogether.
To ensure more people can keep more of what they earn for years to come, the Chancellor also announced plans to cut the basic rate of income tax from 20p to 19p from 2024. The £5bn tax cut for workers, pensioners and savers will be worth £175 on average for 30 million people and will be the first cut to the basic rate in 16 years.
Mr Sunak also announced that there will be an extra £500 million for the Household Support Fund, which doubles its total amount to £1bn to support the most vulnerable families with their essentials over the coming months.
The Chancellor also reduced the VAT on energy saving materials such as solar panels, heating pumps and roof insulation from 5% to zero for five years, helping families become more energy-efficient.
This cost of living support comes on top of the measures already announced, including a £9 billion energy bill rebate package, worth up to £350 each for around 28 million households, an increase to the National Living Wage, worth £1,000 for full time workers, and a cut to the Universal Credit taper, worth £1,000 for two million families.
Boosting Investment, Innovation and Growth
To lift growth and productivity among UK businesses, Sunak set out plans to boost private sector investment and innovation and bring in a new culture of enterprise.
He increased the Employment Allowance – a relief which allows smaller businesses to reduce their employers National Insurance contributions bills each year – from £4,000 to £5,000. The cut is worth up to £1,000 for half a million smaller businesses and starts in two weeks’ time, on 6 April. As a result, 50,000 of these businesses will be taken out of paying NICs and the Health and Social Care Levy, taking the total number of firms not paying NICs and the Levy to 670,000.
The Chancellor also announced two new business rates reliefs will be brought forward by a year to come into effect in April 2022. There will be no business rates due on a range of green technology used to decarbonise buildings, including solar panels and batteries, whilst eligible heat networks will also receive 100% relief. Together these will save businesses more than £200 million over the next five years.
Ahead of the end of the super-deduction, the government will work with businesses and other stakeholders to consider cuts and reforms to best support future investment. And with UK employers spending just half the European average on training their employees, the Chancellor said he will examine how the tax system – including the operation of the Apprenticeship Levy – can be used to encourage employers to invest in adult training.
The Chancellor committed to improving R&D reliefs too. UK business R&D investment is less than half of the OECD’s average as a percentage of GDP, so R&D tax reliefs will be reformed to deliver better value for money for the taxpayer while being more generous where they can make the most difference. The scope of reliefs will also be expanded to cover data, cloud computing and pure maths.
The support for SMEs comes on top of 50% business rates relief for eligible retail, hospitality, and leisure properties, also coming in this April and worth £1.7 billion for small businesses. The Help to Grow Management and Digital schemes, worth thousands of pounds per business, and the £1 million Annual Investment Allowance are also available to continue supporting UK businesses.
The Spring Statement also confirms that:
- A new Efficiency and Value for Money Committee will be set up to cut £5.5 billion worth of cross-Whitehall waste – with savings to be used to fund public services.
- £50 million new funding will be provided to create a Public Sector Fraud Authority to hold departments account for their counter-fraud performance and to help them identify, seize and recover fraudsters money.
- Local residents across the UK will benefit from a fresh set of infrastructure projects as we open the second round of the £4.8 billion Levelling Up Fund. It will continue to focus on regeneration, transport and cultural investments.
This article was sourced from gov.uk: https://www.gov.uk/government/news/chancellor-announces-tax-cuts-to-support-families-with-cost-of-living
News – Personal Tax
Spring Statement 2022: Personal Tax Factsheet
The Government is raising the level at which people start to pay National Insurance contributions, increasing the National Insurance Primary Threshold (PT) and Lower Profits Limit (LPL) from £9,880 to £12,570.
Further details on implementation are set out in the background section of this factsheet.
- This is a tax cut worth over £330 for a typical employee in the year (1) from July 2022
- The Government is also cutting income tax. Taxpayers will gain £175 on average thanks to a 1ppt cut in the basicrate of income tax in 2024, the first cut to the basic rate in 16 years.
National Insurance contributions
The Government will increase the Primary Threshold and Lower Profits Limit – the point at which employees and the self-employed start paying National Insurance contributions (NICs) – to bring them in line with the income tax personal allowance of £12,570.
- This will mean working people will be able to earn £12,570 tax free, an increase of £2,690 in cash terms.
- This will benefit almost 30m working people. This is a tax cut for a typical employee worth over £3301 in the year from July 2022; the equivalent saving for a typical self-employed person would be worth over £250.
- To ensure all individuals see the benefits of the increase as early as possible, while also allowing employers and payroll software providers sufficient time to update their systems, the increase will be implemented from July 2022.
From July, around 70% of workers who pay NICs will pay less NICs than they otherwise would have, even after accounting for the introduction of the Health and Social Care Levy.
Due to this measure, 2.2 million people will be taken out of paying Class 1 (Employee NICs) and Class 4 NICs (Self-employed NICs) and the Health and Social Care Levy entirely, on top of the 6.1 million workers who already do not pay NICs.
The government is also reducing Class 2 NICs payments for lower earning self-employed individuals. From April 2022 self-employed individuals will not pay Class 2 NICs on profits between the Small Profits Threshold (£6,725) and Lower Profits Limit, but they will continue to be able to build up National Insurance credits. This will benefit around half a million self-employed people by up to £165 a year.
Taken together, these measures will meet the government’s ambition to ensure that the first £12,500 earned is tax free (2)
(1) The tax cut is worth £332 to all employees who have only one job and who earn above the Primary Threshold in each pay period across the year from July 2022. The equivalent figure for a self-employed individual is reached by adjusting the employee savings figure to reflect the lower rates of Class 4 NICs paid by the self-employed.
(2) There may be some individuals who continue to pay NICs even if annually they earn less than £12,570, for example, someone whose earning all fall in a single week or month. This is because NICs is charged on a pay period basis and is not annualised, cumulative or aggregated.
- The government will cut the basic rate of income tax by 1ppt from April 2024.
- This is the first cut to the basic rate of income tax in 16 years (the last cut to the basic rate was in 2008-09).
- Over 30m taxpayers will benefit from this policy in 2024-25, with an average gain of £175.
- There will be a three-year transition period for Gift Aid relief to maintain the income tax basic rate relief at 20% until April 2027. This will support almost 70,000 charities and is worth over £300m.
The cut will apply to the basic rate which applies to non-savings, non-dividend income for taxpayers in England, Wales and Northern Ireland; the savings basic rate which applies to savings income for taxpayers across the UK; and the default basic rate which applies to a very limited category of income taxpayers made up primarily of trustees and non-residents.
It is fully costed and fully paid for, including additional funding for the Scottish Government as this is a devolved matter in Scotland.
What does a July implementation mean for employees and the self-employed?
What this means for employees
- Between 6 April and 5 July 2022, employees will be able to earn £190 a week without paying Class 1 NICs and the Levy.
- Between 6 July 2022 and 5 April 2023, this weekly threshold will increase to £242.
- From April 2023 onwards, employees will be able to earn £242 each week, equivalent to £12,570 a year, without paying Class 1 NICs or the Levy.
- The PT will then remain aligned with the income tax personal allowance.
- Employees entitlement to contributory benefits are unaffected by this measure.
What this means for the self-employed
- The self-employed pay NICs on an annual basis, and at the end of the tax year. For the 2022-23 tax year, the self-employed will be able to earn £11,908 before paying Class 4 NICs and the Levy. The annual figure for the self-employed is £11,908, because this accounts for 13 weeks of £9,880 and 39 weeks of £12,570. That means the benefit the self-employed receive in 2022-23 is in line with employees.
- From April 2023 onwards, the self-employed will be able to earn £12,570 before paying any NICs.
- The LPL will then remain aligned with the income tax personal allowance.
- Further, for 2022-23, the point at which the self-employed start paying Class 2 NICs will increase to £11,908. This means that those with profits between the Small Profits Threshold (£6,725) and the LPL (£11,908) will not need to pay Class 2 NICs from April 2022, but will still be able to access entitlement to contributory benefits.
This article was sourced from gov.uk: https://www.gov.uk/government/publications/spring-statement-2022-factsheet-on-personal-tax
News – Business Support
Spring Statement plan to boost business growth and productivity
- The Government has set out plans to incentivise firms to train more, invest more, and innovate more through cuts to tax
The Chancellor announced a series of measures to support businesses at Spring Statement 2021, building on those announced at Autumn Budget and Spending Review 2021.
Increasing the Employment Allowance from £4,000 to £5,000
Employment Allowance is a relief which allows eligible businesses to reduce their employer National Insurance contributions (NICs) bills each year. At the Spring Statement it was announced this would be rising by £1,000 from £4,000.
Around 495,000 businesses (30% of all businesses) will benefit from this increase, including around 50,000 businesses (3% of all businesses) which will be taken out of paying NICs and the Health and Social Care Levy entirely
In total, this means that from April, 670,000 businesses will not pay NICs and the Health and Social Care Levy due to the Employment Allowance
Bringing forward an exemption on business rates for green technology
Making green technology, including solar panels and heat pumps, exempt from business rates from April 2022 will save businesses an extra £35 million in 2022-23, and is expected to be worth around £170m over the next five years to support the decarbonisation of buildings
A 100% relief for eligible low-carbon heat networks which have their own rates bill will also be available. This is on top of reducing the VAT on energy savings materials (ESM) from 5% to 0%, further incentivising homeowners to buy ESMs from businesses as part of a wider package of Government measures targeted at improving energy efficiency
Reforming R&D tax credits to help drive innovation
From April 2023, businesses will be able to claim relief on the storage of their vital data and pure maths research. This is set to boost sectors including AI, robotics, manufacturing, and design. Draft legislation will be published this summer
Planning to encourage greater business investment once the super-deduction ends in 2023
The Government has announced a series of potential policy changes to the UK’s existing capital allowances regime, which they will consider ahead of April 2023. These policies will aim to encourage business investment once the super-deduction ends to drive forward productivity growth
They will be engaging with business organisations and other interested parties from now until the Autumn. The government will also encourage businesses to offer more high-quality employee training and explore whether the current tax system – including the operation of the Apprenticeship Levy – is doing enough to incentivise businesses to invest in the right kinds of training.
These announcements boost the existing business support package, which includes:
- From April 1, and as announced in Autumn Budget 2021, eligible businesses will now be able to receive a temporary business rates relief worth almost £1.7 billion, the biggest single-year cut to business rates in 30 years (outside of emergency Covid reliefs)[Text Wrapping Break]
- Freezing the business rates multiplier for another year saving businesses £4.6 billion over the next 5 years[Text Wrapping Break]
- Introducing the temporary super-deduction, the biggest two-year business tax cut in modern British history. Under the super-deduction, for every pound a company invests, their taxes are cut by up to 25p[Text Wrapping Break]
- Increasing the Annual Investment Allowance to £1 million – the highest level of support for capital expenditure ever provided through the AIA and a generous incentive to invest for over a million SMEs, providing full expensing for all SMEs[Text Wrapping Break]
- Extending the transitional relief for business rates and supporting small business schemes for 2022-23, which will restrict bill increases from between 15% to 25% for SMEs. The extension of these schemes is estimated to save businesses £30 million, protecting small businesses from significant bill increases before the 2023 revaluation[Text Wrapping Break]
- Establishing Help to Grow, which is giving SMEs the tools they need to innovate, grow, and help drive our economic recovery. As a result of the scheme 90% of survey respondents have made changes or are planning to make changes to the way they manage, organise or operate their business[Text Wrapping Break]
Table 1: Implementation
|New Spring Statement measures||Comes into effect||Applies to|
|Fuel Duty cut||6pm Weds 23/03||UK-wide|
|Increasing the Employment Allowance||July 2022||UK-wide|
|Business rates relief for green technology||April 2022||England only|
|R&D tax relief||April 2023||UK-wide|
|O% VAT on Energy Savings Materials (ESM)||April 2022||GB-only*|
|Changes to Capital Allowances regime||April 2023||UK-wide**|
- *The Northern Ireland Executive will receive a Barnett share of the value of this relief until it can be introduced UK-wide.
- **The UK government is considering potential policy changes to the CAs regime ahead of April 2023. These are expected to be UK-wide.
This article was sourced from gov.uk: https://www.gov.uk/government/publications/spring-statement-2022-business-support-factsheet
News – Fuel Duty
Spring Statement 2022: Fuel duty cut by 5p a litre
- Fuel duty will fall to 52.95p per litre, the Chancellor confirmed
- A 5p cut in fuel duty would shave around £3 off the cost of filling a 55-litre family car
The government has confirmed it will cut fuel duty by 5p a litre to ease the pain for drivers facing soaring pump prices.
Fuel duty is currently levied at a flat rate of 57.95p per litre for both petrol and diesel but this will fall to 52.95p per litre, the chancellor confirmed.
It has been frozen for 12 consecutive years but now the chancellor, Rishi Sunak, has gone one step further and cut it by 5p a litre from 6pm tonight.
Calculations by the RAC show that a 5p cut in fuel duty would shave around £3 off the cost of filling a 55-litre family car.
It comes as unleaded stands at an average 167p per litre while diesel stands at 179p per litre, according to The RAC fuel watch.
As part of the Spring Statement 2022, Sunak said: “For the second time in 20 years, fuel duty will be cut. Not by 1p, 2p, or 3p but by 5p per litre.
“This is the biggest cut to all fuel duty rates ever. It will be in place until March 2023 for a full 12-months. The tax cut this year is worth over £5bn.”
Following the announcement by the chancellor, supermarket Asda confirmed it will cut petrol and diesel prices by 6p a litre this evening (including a 1p reduction in VAT). This will take unleaded to below 160ppl and diesel to 170ppl.
‘Respite to millions of motorists’
Edmund King, AA president, said: “The AA welcomes the cut in fuel duty. However, we are concerned that the benefit will be lost unless retailers pass it on and reflect a fair price at the pumps. Average pump prices yesterday hit new records- despite the fall in wholesale costs.”
Howard Cox, founder of the FairFuelUK Campaign, said: “It would be churlish not to be thankful to the chancellor in cutting fuel duty by 5p for 12 months. It will give some respite to millions of motorists that have had and continue to have no choice but to drive.
“It will only benefit drivers and the economy if the new fuel taxation level becomes permanent and is accompanied by the introduction of an independent pump pricing watchdog, we’ve notionally called PumpWatch to stop the perennial fleecing of drivers by businesses and speculators further up the fuel supply chain.”
- The cut takes effect from 6pm on 23 March 2022[Text Wrapping Break]
- This the largest cut across all fuel duty rates ever[Text Wrapping Break]
- This cut, plus the freeze in 2022-23, represents a £5 billion saving over the next 12 months worth around:[Text Wrapping Break]
- £200 for the average van driver
- £1,500 for the average haulier
This article was derived from Your Money: https://www.yourmoney.com/household-bills/spring-statement-2022-fuel-duty-cut-by-5p-a-litre/
News – Economic Forecast
OBR slashes economic growth forecasts
- The OBR downgraded growth in gross domestic product – a measure of the size of the economy – from the 6% forecast for this year at the time of the Budget in October to just 3.8%
- The UK jobs market is expected to strengthen significantly
Forecasts for economic growth have been slashed due to the uncertainty caused by the Ukraine war and rising inflation as Chancellor Rishi Sunak acknowledged the challenges facing the UK.
The Office for Budget Responsibility (OBR) downgraded growth in gross domestic product – a measure of the size of the economy – from the 6% forecast for this year at the time of the Budget in October to just 3.8%.
With inflation at a 30-year high, Mr Sunak promised a series of measures to help household finances – including a 5p per litre cut in fuel duty and a national insurance cut for millions of workers.
Fresh figures published by the Office for National Statistics today revealed the cost of living is already running at its hottest rate since 1992, scaling to 6.2 per cent, underlining the severe living standards shock households are absorbing.
Higher energy costs tend to feed through quickly to the rate of price rises in an economy due to oil, gas and coal being commodities that are consumed widely by businesses and households.
Improved tax receipts driven by better than initially expected GDP growth in 2021 and elevated inflation will cut government borrowing.
Government income will come in a shade below £900bn this year, up from £862bn pencilled in in October.
Borrowing will be just over £55bn lower this year, totalling £127.8bn.
However, a record debt interest bill will push borrowing above what the OBR was expecting in October. The government will need to take on £16.1bn more debt than thought in 2022/23.
The UK jobs market is expected to strengthen significantly, driven by demand rebounding sharply as the degree of influence of the Covid-19 crisis on consumers’ behaviour fades.
The OBR thinks the unemployment rate will be four per cent this year, down 0.8 percentage points from before.
Earnings will grow 5.3 per cent this year, but will be cancelled out by inflation.
This article was sourced from City AM: https://www.cityam.com/spring-statement-obr-slashes-economic-growth-forecasts-on-russia-ukraine-war-inflation-spike/
News – Landlords
Spring Statement 2022: what was announced for landlords?
- The green energy VAT cut could help landlords make their properties more energy efficient, reducing bills for tenants and keeping their own costs down when properties are empty
- No progress on reversing stamp duty surcharge
Today’s Spring Statement, delivered on the two-year anniversary of the first national coronavirus lockdown, focused on addressing concerns about living costs.
Alongside a significant cut to fuel duty, Chancellor Rishi Sunak announced a 1p income tax cut and an increase of the National Insurance threshold.
Read on to find out more details about how the Spring Statement 2022 could affect landlords and the rental market.
Green energy VAT cut for homeowners
The Chancellor announced a cut in VAT for homeowners buying energy saving materials such as solar panels, heat pumps, and insulation.
For the next five years, homeowners will pay zero per cent VAT on materials for improving the energy efficiency of their properties – that’s down from five per cent VAT relief.
The tax savings are estimated to be worth £1,000 up front and contribute to an annual energy bill saving of £300.
This measure could help landlords make their properties more energy efficient, reducing bills for tenants and keeping their own costs down when properties are empty.
From 2025, the minimum energy efficiency standard for rental properties is set to be increased to C for new tenancies. It’ll then be extended to existing tenancies from 2028.
Will landlords benefit from the Chancellor’s tax cuts?
It was announced today that the basic rate of income tax will be cut from 20p to 19p in the pound by the end of the current Parliament in 2024. According to the Chancellor, this will equate to a £5 billion tax cut for 30 million people.
Alongside this, the National Insurance threshold will rise by £3,000 this year to £12,570 (the same level as income tax). The Treasury estimates this will save around £6 billion a year for the 30 million working people in the UK.
Despite today’s announcements, many landlords could be affected by rising taxes in the coming months.
From April, National Insurance will increase by 1.25 per cent. In April 2023, the extra 1.25 per cent will be collected as a separate Health and Social Care levy.
Some landlords may also be affected by so-called ‘stealth taxation’, whereby people fall into higher tax bands due to thresholds and allowances not being increased.
Read our guide on buy-to-let tax changes for more information on income tax rates for landlords, Making Tax Digital, and extra time to pay capital gains tax.
Landlords escape buy-to-let stamp duty increase
Despite speculation, the government decided against increasing the stamp duty surcharge on additional homes from three per cent to four per cent.
Following last year’s Autumn Budget, it emerged that the Chancellor scrapped plans to increase stamp duty costs for landlords and second home buyers at the last minute.
A document from the Office for Budget Responsibility released after the Budget accidentally included a line which said the stamp duty surcharge “has been raised to four per cent”.
This led to concerns that landlords would face another tax hike as part of today’s Spring Statement in line with the government’s plans to raise funds to tackle the cost of living crisis.
Had the stamp duty surcharge on additional properties in England been increased to four per cent, it would have brought it in line with the rate paid by property investors in Scotland and Wales.
No progress on reversing stamp duty surcharge
Although English landlords will be relieved that the stamp duty surcharge wasn’t increased, some in the industry will be left disappointed that the Chancellor didn’t announce wider reform of the controversial tax.
Prior to the Spring Statement, the National Residential Landlords Association (NRLA) called on HM Treasury to scrap the three per cent stamp duty surcharge.
It said that allowing landlords and second home buyers to pay normal stamp duty rates could earn the government an estimated £10 billion in additional corporation tax.
The NRLA commissioned a study by economic consultancy Capital Economics, which found that removing the stamp duty surcharge would lead to an extra 900,000 private rental homes made available over the next 10 years.
Could a new approach to taxing landlords be on the way?
Although it wasn’t referenced in today’s Spring Statement, the government could be looking at ways to simplify taxation of property income.
Earlier this month, the Office for Tax Simplification (OTS) launched a Call for Evidence and online survey to gather landlords’ views.
It wants to hear about:
- the most complex parts of paying tax on property income
- how easy it is to report the right amount of income and qualifying expenses
- suggestions for improvements to the current system
- whether letting agents or rental platforms could play a role in helping landlords report
The consultation is open now and closes on 5 June 2022.
Although the OTS is independent, the government has frequently used its research to inform tax decisions. For example, in July 2020 the Chancellor commissioned the OTS to review the capital gains tax system.
Read our guide on how to file a landlord tax return for further information.
No updates on major rental reforms
In February, the government announced details of widespread rental reforms as part of its levelling up agenda.
The reforms are set to include:
- the end of Section 21 evictions
- more fines and bans for rogue landlords
- a consultation on a national landlord register
- a minimum standard for all private rental properties
There was no update in the Spring Statement about how these proposals could work and when they could be introduced.
It’s thought that a long-awaited white paper focusing specifically on rental reforms could be published this spring.
Looking ahead to a full Budget in the autumn
Although there were no specific rental market measures announced in the Spring Statement, landlords are likely to be affected by the Chancellor’s tax and fuel duty cuts.
The Treasury views the Spring Statement as a short update on the government’s big picture spending plans.
There are likely to be more property-related proposals in the full Autumn Budget, which is due to take place in October or November.
In the meantime, keep an eye on our Knowledge centre for updates on key issues such as rental reforms and how the cost of living crisis is affecting landlords and tenants.
This article was derived from Simply Business: https://www.simplybusiness.co.uk/knowledge/articles/2022/03/spring-statement-2022-for-landlords/
Government announces plans for largest ever R&D budget
The largest ever research and development budget, worth £39.8 billion, has been allocated across the Department for Business, Energy and Industrial Strategy’s partner organisations, the government has confirmed today.
A significant proportion of the budget has been allocated to UK Research & Innovation (UKRI), which will receive over £25 billion across the next 3 years, reaching over £8.8 billion in 2024-2025, its highest ever level and over £1 billion more than in 2021-2022. This will include an increase in funding for core Innovate UK programmes by 66% to £1.1 billion in 2024-2025, helping connect companies to the capital, skills and connections they need to innovate and grow.
The government’s R&D investment plans, combined with the R&D tax credits programme, will give businesses the confidence to invest in the field following the pandemic, with research finding that every £1 of public expenditure in R&D eventually leverages an average of £2 of additional private investment.
‘Pandemic pressure’ sees pension withdrawals rise 20% in a year
More than £8bn was flexibly withdrawn from pensions between April and December 2021 – a 19% increase from a year earlier.
A total of 648,000 people withdrew money from their pensions flexibly in the eight months to December 2021, with the average amount at £12,800.
In total during this period, £8.3bn was withdrawn, which is up from the £7bn recorded in the same period of 2020, according to the latest HM Revenue & Customs figures.
Meanwhile the statistics also reveal that 9.4 million people are contributing to a personal pension with annual average payments increasing from £3,000 in 2018/19 to £3,300 in 2019/20. Overall, £31.3bn was paid into pensions in 2019/20, up from £27.9bn in 2018/19.
Further, in 2019/20, 42,350 taxpayers reported pension contributions exceeding their Annual Allowance through Self-Assessment. This totalled £949m in 2019/20, up from £819m in 2018/19 and £912m in 2017/18.
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