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No further Tax Increases: Spring Statement 2025

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The UK Chancellor of the Exchequer, Rachel Reeves has delivered her second fiscal statement announcing her focus is on growth. In the run up to the event, the Chancellor stated that she ‘remains committed to one major fiscal event a year to give families and businesses stability and certainty on upcoming tax and spending changes and, in turn, to support the government’s growth mission’.

The Spring Statement 2025:

The Chancellor confirmed her commitment that there would be no major changes to tax policy – she did announce measures to crack down on tax avoidance and evasion estimated make an extra £1bn in savings which includes hiking penalties for late VAT & Self-Assessment submissions.

Here is our detailed Spring Statement 2025 breakdown

HB_Accountants_(W-6119373)_FSS_Mar25Download

The Chancellor did meet her commitment that there would be no major tax announcements but tax is only one side of the equation. The other is spending and the Spring Statement
confirmed a number of the measures recently announced, namely:

  • cuts to the welfare state
  • cuts to the civil service
  • an increase in defence spending

There were also announcements about the rollout of the Making Tax Digital (MTD) for Income Tax project.

GOVERNMENT SPENDING ANNOUNCEMENTS

National security: Reductions in the Official Development Assistance budget (overseas aid) will support an increase in NATO-qualifying defence spending to 2.5% of GDP by April 2027, with an ambition to increase to 3% in the next Parliament as economic and fiscal conditions allow. The Spring Statement accelerates towards this by providing an additional £2.2 billion of funding for the Ministry of Defence next year.

Reform: As announced by the Secretary of State for Work and Pensions, the government wants to create a more pro-work welfare system for those who can work and to protect those who cannot. These reforms are projected to save £4.8 billion from the welfare budget in 2029/30 and welfare spending will fall as a share of GDP in the medium term.

This will include:

The Universal Credit health element will be frozen for existing claimants until 2029/30. For new claims, the Universal Credit health element will be reduced to £50 a week in 2026/27 and then frozen until 2029/30.

The government will increase the Universal Credit standard allowance for new and existing claims above inflation from April 2026, reaching CPI + 5% from April 2029.

The government will increase checks on potential Universal Credit claimants by introducing more ways to verify the amount of savings they hold, as well as their earnings and expenses. The government is also looking for efficiencies from the state, including by bringing NHS England back into the Department of Health and Social Care. The Spring Statement announces a £3.25 billion Transformation Fund to drive efficiencies across government.

Growth: According to the government, growth is their central mission.The government will set out capital spending plans for the Parliament at the Spending Review in June. Ahead of that, the government has announced an additional £2 billion for social and affordable housing for 2026/27, as part of the government’s ambition to build 1.5 million homes in England in this Parliament, supported by reforms in the Planning and Infrastructure Bill.
To ensure the construction industry has the capacity to deliver this government’s plan to get Britain building, the government has committed to a £625 million package for skills
in construction, expected to provide up to 60,000 more skilled workers this Parliament.

Our detailed guide above includes details on the following;

PERSONAL TAX

  • Tax bands and rates
  • Pension tax limits
  • Non-UK domiciled individuals

NATIONAL INSURANCE CONTRIBUTIONS

  • Employees and employers
  • The self-employed and NICs

EMPLOYMENT

  • National Living Wage and National Minimum Wage
  • Taxable benefits for company cars
  • Company vans & double cab pick up vehicles

CAPITAL GAINS TAX

  • Capital Gains Tax rates
  • Capital Gains Tax annual exemption
  • Business Asset Disposal Relief and Investors’ Relief

INHERITANCE TAX

  • Inheritance Tax nil rate bands
  • Unused pension funds and death benefits
  • Agricultural Property Relief and Business Property Relief

BUSINESS

  • Making Tax Digital (MTD) for Income Tax
  • Corporation Tax rates
  • Capital allowances
  • Furnished Holiday Lettings

OTHER MATTERS

  • Consultations
  • The VAT registration threshold
  • Removal of VAT exemption for
    school fees

Make sure you understand what steps you need to take now to stay compliant and avoid to any penalties. We are here to help support and grow your business by giving you access to experienced accountants, tax advisors and useful information no matter your business size or sector.

Please feel free to contact the team on 01992 444466.  We’re accountants for business and we’re here to help you grow.

The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above

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