UK: Tax plan from “Spring Statement 2022”
A new “tax plan” is light on detail
A new “tax plan” is light on detail
The United Kingdom (UK) Chancellor of the Exchequer this week delivered the Spring Statement 2022 to the UK House of Commons.
The announcement of a new “tax plan” was light on detail, and thus making it difficult to “read the tea leaves” when it comes to the government’s long-term tax strategy. There were very few clues as to how the UK government plans to address the numerous challenges in the current tax system.
Standing firm on the national insurance rise could increase the division between those taxpayers who receive employment income and those who receive pensions or rental income.
The Chancellor did offer some clues as to the direction of corporate tax, such as:
- A preference to keep the rate to 25% next year, but compensate with a narrowing of the tax base.
- References to the U.S. tax system and the similarities in approach between this plan and the long-standing policies of the United States.
- A possible system of a high top rate that is complemented by a proliferation of targeted reliefs.
A lot of difficult decisions may be delayed until the autumn, but the Chancellor promised to consult with businesses before introducing significant tax policy changes.
Read a March 2022 report prepared by the KPMG member firm in the UK
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