4 SPRING STATEMENT l 23 March 2022 Scotland sets its own basic rate of tax on non-savings, non-dividend income and will receive corresponding funds under the Barnett formula. VAT on energy saving Eligibility for VAT relief on energy saving materials will be expanded and the VAT rate reduced to zero for five years from 1 April 2022. These changes do not apply to Northern Ireland. Research & development tax credits From April 2023, all data, cloud computing and pure maths costs associated with research and development (R&D) will qualify for R&D relief. Green relief for business rates The Autumn 2021 Budget introduced targeted business rates exemptions from 1 April 2023 until 31 March 2035 for eligible plant and machinery used in onsite renewable energy generation and storage, and a 100% relief for eligible low-carbon heat networks with their own rates bill. The implementation of these measures will now take effect from April 2022. Tax Plan The Chancellor announced a ‘Tax Plan’ alongside the Spring Statement, setting a basis for consultation ahead of measures in the Autumn 2022 Budget. The plan echoes themes in Mr Sunak’s recent Mais lecture at the Bayes Business School and focuses on three areas: • Capital The Chancellor wants to reform the tax incentives for investment from April 2023, when the 130% super-deduction will end and the main corporation tax rate is due to rise to 25%. • People In his speech Mr Sunak said that he wanted to ‘consider whether the current tax system, including the operation of the apprenticeship levy, is doing enough to incentivise businesses to invest in the right kinds of training’. • Ideas R&D expenditure in the UK is half the OECD average, but the UK spends more than many other countries on R&D tax relief. The Chancellor plans to reform R&D tax credits, potentially making some R&D expenditure credits more generous.
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