Chancellor announces ‘tax cuts to ease cost of living pressures’ in Northern Ireland
The Chancellor delivered a Spring Statement today that “puts billions of pounds back into the pockets of hard-working people” in Northern Ireland – unveiling a series of tax cuts to ease the cost of living.
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 800,000 working people in Northern Ireland with a typical employee saving over £330 a year, whilst the typical self-employed person will save over £250. This means the UK now has some of the most generous tax thresholds in the world.
Mr Sunak also announced that fuel duty for petrol and diesel will be cut by 5p per litre from 6pm tonight (23 March) to help drivers across the UK with rising costs. 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, as the OBR currently predict, inflation and debt will be lower. 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 businesses.
The UK Government is also providing the Northern Ireland Executive with an additional £47 million through the Barnett formula next year, as a result of measures announced by the Chancellor today.
Chancellor Rishi Sunak said:
“More than 800,000 people in Northern Ireland will be hundreds of pounds a year better off thanks to our raising of the National Insurance thresholds, and from next year people in Northern Ireland will benefit from an Income Tax cut worth £140 million.
“Cuts to fuel duty will benefit people and businesses, which together with the freeze means people save £100 per car on average a year.
“We’re helping thousands of small businesses by increasing the Employment Allowance, a tax cut worth up to £1,000 a year, boosting innovation and growth.”
Secretary of State for Northern Ireland Brandon Lewis said:
“Today’s Spring Statement shows the UK Government’s commitment to delivering for people in all four corners of the UK.
“People in Northern Ireland will be feeling financial pressures which events beyond our control have placed upon us all, but decisions such as cutting fuel duty, raising the National Insurance thresholds, and increasing the Employment Allowance will help alleviate these.
“The UK Government is dedicated to seeing Northern Ireland’s potential for growth recognised and supported. I welcome the measures introduced by the Chancellor today and look forward to continuing to work to make Northern Ireland a better place to live, to work and to invest.”
To grow the world’s very best talent in AI, the Government will partner with industry and academia to create 1,000 new AI PhDs across the UK. The Government will invest £117m to create PHDs at Centres for Doctoral Training. This will train a new generation of AI researchers who will develop and use AI in areas such as healthcare, climate change and creating new commercial opportunities.
Delivering the statement, the Chancellor made clear that our 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 financial support for people and businesses comes as part of a wider tax plan announced by the Chancellor that will create better conditions for growth and will share proceeds from growth more fairly – ensuring people can keep more of what they earn.
Mr Sunak also announced that the Northern Ireland Executive will receive £14 million more funding as there will be an extra £500 million for the Household Support Fund, which doubles it’s total amount to £1 billion to support the most vulnerable families with their essentials over the coming months.
This cost of living support comes on top of the measures that Chancellor has already announced over the recent months to support families. This includes 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 2 million families.
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 to create a Public Sector Fraud Authority to hold departments to 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.
The basic rate of income tax will be cut by 1p in the pound in England, Wales and Northern Ireland. Income tax rates are devolved in Scotland but, as set out in the agreed Fiscal Framework, the Scottish Government’s funding is automatically increased as a result of this tax cut in order to benefit people in Scotland. This is initially worth £350 million in 2024-25