2025 UK Spring Statement
Chancellor Rachel Reeves delivered the 2025 Spring Statement on Wednesday 26 March, with no major policy changes. Key tax rates, thresholds, and policies remain unchanged from the Autumn 2024 budget announcement. The main announcements focused on welfare cuts, increased defence spending, and higher public sector investment, with no significant tax changes introduced.
Despite widespread public opposition, the planned business property relief changes for inheritance tax—affecting farmers and businesses—will still take effect from April 2026.
For Northern Ireland businesses, the statement includes an additional £14 million for the NI Executive, along with several tax and compliance updates that may impact general business operations.
See our summary below to see how these changes could affect you:
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Companies
- No changes to VAT, Corporation Tax, Inheritance Tax and Capital Gains Tax rates.
- No key changes to the announcements made in the 2024 Autumn budget therefore see our Autumn 2024 Budget Summary here.
- Important note: From April 2025, double-cab pick-ups with a payload of 1.0 tonne or more will be treated as cars for tax purposes, affecting Corporation tax, capital allowances, and benefit-in-kind calculations (this won’t affect double cap pick up’s already on hand).
Other Measures Mentioned:
- R&D Tax Credits: Consultation on expanding advance clearances.
- Transfer Pricing: More certainty for businesses via Advance Pricing Agreements.
- Tariff Suspensions: Temporary tariff relief on certain goods (e.g. plywood, range of food stuffs) until June 2027.
Tackling Tax Evasion & “Phoenixism”
- HMRC, Companies House & Insolvency Service increasing enforcement.
- More directors held personally liable for company tax debts.
- Target: Protect £250 million in tax by 2026-27.
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Self Employed
- No Changes to VAT, Income Tax, Class 2/4 National Insurance, Capital Gains Tax, Inheritance Tax.
- No key changes to the announcements made in the 2024 Autumn budget therefore see our Autumn 2024 Budget Summary here.
- Key Note: From April 2025, double-cab pick-ups with a payload of 1.0 tonne or more will be treated as cars for tax purposes, affecting income tax, capital allowances, and benefit-in-kind calculations. (this won’t affect double cap pick up’s already on hand).
- No Changes to VAT, Income Tax, Class 2/4 National Insurance, Capital Gains Tax, Inheritance Tax.
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National Living Wage From April 2025
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Individuals & Other
- No changes to Income Tax, National Insurance, Inheritance Tax and Capital Gains Tax rates.
- No key changes to the announcements made in the 2024 Autumn budget therefore see our Autumn 2024 Budget Summary here.
- Confirmation that Sole traders & landlords earning over £20,000 to join Making Tax Digital (MTD) for Income Tax from April 2028.
- Late Income tax payment penalties increasing from April 2025 (3% after 15 days, 6% after 30 days, 10% annually after 31 days).
- From summer 2025, employed individuals liable to the Higher Income Child Benefit Charge (HICBC) will be able to report their family’s Child Benefit payments through a new digital service and opt to pay HICBC directly through PAYE, without the need to register for Self Assessment.
Universal Credit Changes:
- Health element frozen for existing claimants until 2029-30.
- New health claims from 2026-27 reduced to £50 per week & frozen until 2029-30.
- Standard allowance rising above inflation from April 2026.
Welfare Fraud & Error:
- More checks on savings, earnings & expenses to reduce fraud.
- 500+ new fraud & error staff recruited.
HMRC Debt & Compliance Crackdown:
- £87m invested in private sector debt collection.
- £114m for 600 new HMRC debt staff.
- £100m for 500 new HMRC compliance staff.
- Restarting direct recovery of unpaid tax from those able to pay.