Big accounting firms have mixed reviews on Chancellor’s plans

There was a lot of promised tax cuts and initiatives from the Chancellor in his spring statement, but not all of them have been received with overwhelming enthusiasm by the country’s biggest accounting firms.

Tom Evennett, EY head of private client services, UK, said the Chancellor made some “eye-catching announcements” in response to the increased cost of living.

“First, alignment of the lower national insurance thresholds from July 2022 with those for income tax (at £12,570 – although this appears to be frozen in future years in the same ways as income tax thresholds) will come at a cost of £6.25bn in 2022-23,” he said.

“The Chancellor also announced an income tax cut of 1p to further support individuals and families with their take home pay (worth a further £5bn) but this will only apply from 2024. This provides a direction of travel for tax policy going forwards together with the announcement of the Tax Plan.”

Sarah Farrow, EY private client services partner, added the other striking announcement – which comes into effect immediately – is the reduction in fuel duty by 5p.

“However, this reduction is limited to one year and may be overtaken by subsequent changes in petrol and diesel prices, which are over £1.60 per litre on the forecourt today,” she said.

Source Financial Accountant click here to read more.