Spring Statement: Small cut in red diesel duty; help on NI

The red diesel fuel duty rate is expected to reduce by about 1p/litre, as it falls in proportion with the 5p/litre cut for road fuels effective from 6pm on 23 March.

In a bid to help with the rising cost of living, chancellor Rishi Sunak’s Spring Statement increased a planned national insurance (NI) threshold rise of £300 to £3,000.

This aligns the threshold at which NI starts to be charged to £12,570 for each individual, in line with the income tax threshold.

See also: Tax advice on fwi

This is worth about £330 a year to employees, but appears to be effective only from July.

Sean McCann, chartered financial planner at NFU Mutual, said: “Raising the threshold for when someone starts paying NI by £3,000 goes some way to fixing the unfairness of the 1.25 percentage point rise [to help pay for health and social care]. Everyone will benefit from this, but it will make a real difference to low earners.

“However, it’s disappointing the chancellor didn’t go further and delay the hike in NI.”

Mr Sunak also committed to cut the 20% income tax rate to 19% by 2024.

While many of the measures were welcome, Andrew Robinson, head of agriculture at accountant Armstrong Watson, said they were a drop in the ocean compared with the massive increase in input costs faced by farmers in recent months.

Investment tax reliefs review

To encourage business investment spending, there will be a review of enhanced research and development tax credits, which are available only to companies.

There will also be a consultation on improving other business investment reliefs, with announcements on these measures to come in the Autumn Budget.

Business rates relief

A new temporary business rates relief of 50% from next month for the hospitality, retail and leisure sectors will benefit some diversified farm businesses.

There was also a VAT cut to 0% for householders investing in energy-saving materials, including solar panels, heat pumps and insulation.

Farming and food security

Tim Farron, MP for Westmorland and Lonsdale, which neighbours Mr Sunak’s Richmond constituency, said the chancellor had no plan for farming and food security.

Mr Farron asked: “Is he [the chancellor] aware that hundreds and hundreds of farmers are leaving the industry because of the botching of the transition from the old basic payments system to the new system?”

He called on the government to rethink and freeze Basic Payment Scheme cuts for two years to allow farmers time to catch up and enter new schemes.