We were told to expect a Spring Statement with an emphasis on reducing public spending and little or no tax changes. Today’s announcement from Chancellor Rachel Reeves delivered exactly that. It coincided with confirmation from the Office for Budget Responsibility (OBR) that the UK’s growth forecast for 2025 has halved, now 1% instead of 2% growth.
Today’s statement aims to address the government’s budget deficit of £36.1bn. The key points are:
Making Tax Digital
The timeline for including more sole traders and landlords in Making Tax Digital (MTD) was confirmed within the Spring Statement. MTD for Income Tax will be extended to sole traders and landlords with income over £20,000 from April 2028. This adds to the current timelines:
- April 2026 sole traders and landlords with income over £50,000
- April 2027 sole traders and landlords with income over £30,000
The Spicer & Co team will be contacting clients who fall into MTD for Income Tax from April 2026 shortly.
Housing
Last year’s changes to England’s planning system are expected to boost housebuilding to a 40-year high by 2030 reaching 305,000. Many businesses in the construction and property sectors will welcome this confirmation … despite the total falling short of the government’s pledge to build 1.5 million houses by the end of 2030.
Welfare
Changes in welfare spending have been in the news lately. Further plans were announced today, cutting the universal credit health element by 50% and freezing it for new claimants. (This credit was previously linked to inflation.)
The universal credit standard allowance will increase from £92 per week in 2025-26 to £106 per week by 2029-30. This means a further 150,000 will not receive carer’s allowance or the carer element of universal credit.
These changes will have a big impact. The government’s assessment predicts the cuts to welfare will mean 250,000 more people – including 50,000 children – will be pushed into poverty by 2030.
Tax Fraud
The government aims to increase the number of tax fraudsters charged each year by 20%.
Defence
The Ministry of Defence will get an additional £2.2bn next year. The chancellor pledged to spend 2.5% of GDP on defence by 2027.
‘While minimal changes affect businesses and individuals, the Spring Statement coincides with the implementation of many changes announced in the autumn budget,’ says Suzanne Spicer of Spicer & Co Chartered Accountants in Dunstable.’
How does the Spring Statement impact you or your business? If you have any queries or concerns, talk to the team at Spicer & Co. We’ll cut through the jargon, offering clear advice … and a coffee.