The 2022 Budget – Recapping the Important Details

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So, Wednesday 23rd March 2022 was an important day because it was the official Budget speech given by Rishi Sunak. Suffice it to say, this was a pivotal moment, as it outlined what the government was doing to help people everywhere tackle the rising costs of living. 

As an accountant service based in Dorset, we were very interested to see what was said. The results were, in truth, quite interesting, so let’s take a look at what was said and done. 

Economic Growth 

That was a definite period of economic growth that should be mentioned. The Chancellor said that the Office for Budget Responsibility had forecast that the economy would grow by 3.8% during 2022.

It is predicted that GDP will grow by 1.8% in 2023, 2.1% during 2024, 1.8% during 2025, and 1.7% during 2026. The expected 3.8% growth that is supposed to take place in 2022 is down from the initial forecast for 2022, which was 6% growth. 

However, there are positives. The economy managed to grow by 7.5% during 2021. This comes after a decline of 9.4% during 2020 when the first wave of the COVID-19 pandemic took place. 

Fuel Duty

The cost of living is going up, but there have been measures to try and mitigate this. For example, fuel duty has been cut again for the second time in 20 years.

There will be a 5p per litre reduction for the next 12 months. This means that it’s possible to save a few pounds every time you fill up your vehicle with fuel. Considering the rising cost of fuel due to tensions in Ukraine and the natural depletion of resources, this is a welcome relief for drivers. 

National Insurance Breaks

One of the meatier updates, and the one that we were most interested in as an accountant service, was the national insurance break that will be received.

National insurance is a tax that everybody has to pay. The amount that you pay depends on your wage, like regular taxes. In the past, any earnings over £9000 were subject to national insurance tax. However, the Chancellor has raised the threshold for paying national insurance, matching the income tax threshold. The first £12,570 that a person earns will be national insurance tax-free.

From a self-assessment perspective, this is good news, as it is self-employed people who have to do the most planning when it comes to taxes. Whilst this may not affect bookkeeping too much, it will change how much is paid every year. It would probably be best if an accountant in the Hampshire area were used to ensure that you’re not paying too much effectively. 

Final Thoughts 

The 2022 budget was an important speech that everybody was waiting for. It’s no secret that the cost of living is getting higher. Inflation, coupled with the energy price hike, means that many people are going to be having difficult years. That’s why people need to have some measure of support from the government, and in this case, they have delivered a reasonable package. 

Kimberley McCarthy

I am a prominent member in a local women’s networking group and am always happy to share my advice and knowledge. I am a strong finance professional with a demonstrated history of working in the financial industry. I have a BA Hons in Accounting and Finance, CeMAP (Certificate in Mortgage Advice and Practice from The London Institute of Finance), CeRer (Certificate of Equity Release) and Financial Accounting, and am QuickBooks certified. Skilled in Negotiation, Business Planning, Customer Service, Certified Mortgage Planning, and Financial Account Management.