The Chancellor has delivered his Spring Statement, including a range of new business support interventions.

The Chancellor of the Exchequer’s highly anticipated Spring Statement has been delivered to Parliament. It comes at a time of challenging economic circumstances, with rapidly rising inflation pushing the cost of living up to a 30-year high.

Alongside measures aimed at easing financial pressures on households and families, Rishi Sunak announced a series of actions to support businesses, building on previously publicised interventions at Autumn Budget and Spending Review 2021.

Within the Spring Statement, the following measures were highlighted as part of the Chancellor’s plans to create a 'culture of enterprise', helping businesses boost investment, innovation, and growth:

• Cutting fuel by 5p per litre for 12 months. This represents a £5 billion saving over the next 12 months, estimated to be worth around £200 for the average van driver and £1,500 for the average haulier.
• Increasing the Employment Allowance from £4,000 to £5,000; starting 6 April 2022. This allowance enables eligible businesses to reduce their employer National Insurance contributions (NICs) bills each year. The cut is worth up to £1,000 for half a million smaller businesses.
• Making green technology, including solar panels and heat pumps, exempt from business rates from April 2022. This is estimated to save businesses an extra £35 million in 2022-23, and is expected to be worth around £170 million over the next five years, supporting the decarbonisation of buildings. A 100% relief for eligible low-carbon heat networks which have their own rates bill will also be available.
• Reducing VAT on energy savings materials (ESMs) from 5% to 0%. This is intended to incentivise 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, business will be able to claim relief on the storage of their vital data and pure maths research. The aim is to boost sectors including AI, robotics, manufacturing, and design. Draft legislation will be published this summer.
• A series of potential policy changes to the UK’s existing capital allowances regime, which the Government will consider ahead of April 2023. These policies aim to encourage business investment once the super-deduction ends, in order drive forward productivity growth. The Government will be engaging with businesses and other interested parties from now until the autumn.

The Chancellor also 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.

Mr Sunak explained that these new interventions are intended to boost his previously announced business support package, which includes:

• From 1 April 2022, eligible retail, hospitality, and leisure businesses will receive a temporary 50% business rates relief, up to £110,000.
• Freezing the business rates multiplier for another year, saving businesses £4.6 billion over the next five years.
• Introducing the temporary super-deduction, a two-year business tax cut, where for every pound a company invests, their taxes are cut by up to 25p.
• Increasing the Annual Investment Allowance to £1 million.
• 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.
• Establishing Help to Grow, which affords SMEs the tools to innovate, grow, and help drive an economic recovery.

Delivering the Spring Statement, Chancellor Rishi Sunak said:

'The tax plan I’ve announced today will help people and businesses deal with rising costs, it will help raise the future growth rate of this country.

'Cutting taxes means businesses have better conditions to invest and grow tomorrow, and people keep more of what they earn for years to come.'

The full list of the Spring Statement measures aimed at helping UK businesses can be accessed at the HM Treasury website.