Rishi Sunak announces employment allowance increase and improved R&D tax breaks

Follow us on: Follow us on Twitter Follow us on Linkedin Subscribe to YouTube

What might the 2022 Spring Statement mean for your business?

Chancellor Rishi Sunak’s Spring Statement includes measures that the UK government says are aimed at boosting investment, innovation and growth. Those of key interest to startups and small businesses include:

  • Increase to Employment Allowance

  • GreenTech rate reliefs brought forward

  • Improvements to R&D relief

Employment Allowance

The chancellor announced a £1,000 increase to Employment Allowance that will benefit around half a million smaller businesses. The change allows smaller businesses to reduce their employers National Insurance contribution (NIC) bills each year – from £4,000 to £5,000.

HM Treasury stated that the cut will be worth up to £1,000 for half a million smaller businesses and would start on 6 April. The move will mean 50,000 of these businesses will be taken out of paying NICs and the Health and Social Care Levy.

Green technology

The Chancellor also announced that two new business rates reliefs will be brought forward by a year to come into effect in April 2022. There will be no business rates due on a range of green technology used to decarbonise buildings, including solar panels and batteries. Eligible low-carbon heat networks will also receive 100% relief. These measures are intended to save businesses more than £200 million over the next five years and are on top of reducing the VAT on energy savings materials (ESM) from 5% to 0%.

R&D reliefs

The Chancellor also announced a commitment to improving R&D reliefs. HM Treasury reports that UK business R&D investment is less than half of the OECD’s average as a percentage of GDP. The reformed R&D tax reliefs are intended to “deliver better value for money for the taxpayer while being more generous where they can make the most difference”. The scope of reliefs will also be expanded to cover data, cloud computing and pure maths. HM Treasury said that draft legislation will be published this summer.

Further detail of the announcements is expected from HM Treasury



We have pulled the resources on this page together for you to help with your independent research and business decisions. This page contains link(s) to third party websites and resources that we (Barclays) are not providing or recommending to you.

Barclays (including its employees, Directors and agents) accepts no responsibility and shall have no liability in contract, tort or otherwise to any person in connection with this content or the use of or reliance on any information or data set out in this content unless it expressly agrees otherwise in writing. It does not constitute an offer to sell or buy any security, investment, financial product or service and does not constitute investment, professional, legal or tax advice, or a recommendation with respect to any securities or financial instruments.

The information, statements and opinions contained in this content are of a general nature only and do not take into account your individual circumstances including any laws, policies, procedures or practices you, or your employer or businesses may have or be subject to. Although the statements of fact on this page have been obtained from and are based upon sources that Barclays believes to be reliable, Barclays does not guarantee their accuracy or completeness.

Share this page

Go back to the top of the page