Spring Statement & OBR Forecasts – What It Means for Your Business
Last week, Chancellor Rachel Reeves delivered her Spring Statement, outlining the government’s latest economic plans, tax policies, and public spending decisions.
The Economic Outlook
The Office for Budget Responsibility (OBR) has downgraded its GDP growth forecast for this year to 1% (down from 2% last autumn). The reasons? Falling business and consumer confidence, rising European energy costs, higher government borrowing, and global uncertainties like the war in Ukraine and trade tariffs.
However, the longer-term outlook has improved, with GDP growth forecasts for the next four years being upgraded.
Inflation is now expected to average 3.2% in 2025 (previously estimated at 2.6%) but should fall to 2.1% in 2026 and 2% by 2027.
Tax & Spending – No Immediate Tax Hikes
Sticking to her fiscal rules, the Chancellor avoided major tax increases. Instead, she focused on cutting public spending, with reforms to welfare and government departments.
The good news? No new tax changes until the Autumn Budget 2025. The government is instead focusing on economic growth—especially through increased homebuilding.
What This Means for Your Business
- Making Tax Digital (MTD) Expansion
From April 2028, sole traders and landlords with income over £20,000 will need to comply with MTD for Income Tax. If that includes you, we’ll help you get set up with compatible software. - Business Rates Reform
A summer report will outline the future of business rates, with further details expected in the Autumn Budget. - R&D Tax Relief – More Scrutiny
The government is looking at mandatory advance clearances for certain R&D claims to reduce fraud and errors. There’s also talk of a £25,000 minimum spend requirement for claims. If you rely on R&D tax relief, this could be a big change. - Phoenixing Crackdown
HMRC, Companies House, and the Insolvency Service are stepping up anti-avoidance measures against directors who repeatedly liquidate companies to avoid paying taxes and debts. In some cases, HMRC may demand upfront tax payments for new businesses.
Final Thought
Many had hoped for relief from the Employers’ NI hike due next month, but the Spring Statement didn’t touch on it. Any new tax changes will now have to wait for the Autumn Budget 2025.
If any of this affects you, give us a call—we’ll make sure you’re prepared.
Making Tax Digital (MTD) – More Small Businesses Affected
From April 2028, if you’re a sole trader or landlord earning more than £20,000, you’ll need to comply with Making Tax Digital for Income Tax.
What This Means for You
- Quarterly tax reporting using MTD-compatible software
- End-of-year tax return must also be digital – no more HMRC free online filing
- Starts April 2028 for those earning £20,000+
If this is a big change for you, we’re here to help make it as smooth as possible.
Public Procurement Act 2023 – More Opportunities for Small Businesses
The Public Procurement Act 2023 is now in force, bringing:
✅ A central digital platform for public sector contract bids
✅ Mandatory 30-day payment terms – no more long waits for government payments
✅ Stricter rules on poor suppliers, meaning better chances for reliable businesses
With £400bn spent on public procurement every year, this could be a great opportunity for small businesses. If you want to explore how to get involved, let’s chat.
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Landlord Alert: New Energy Efficiency Rules Coming
The government is considering higher energy efficiency requirements for rental properties by 2030. This could mean:
- Mandatory insulation upgrades before installing solar panels or smart meters
- A potential £15,000 spending cap per property
- A £10,000 affordability exemption for landlords who qualify
The consultation closes 2 May 2025. If you want to have your say, now’s the time.
April 2025 – Employer Costs Are Rising
The National Minimum Wage and Employer’s NI rates are increasing this April.
New Minimum Wage Rates
| Category | Hourly Rate |
| 21+ (National Living Wage) | £12.21 |
| 18-20 years | £10.00 |
| 16-17 years / Apprentices | £7.55 |
| Accommodation Offset | £10.66 |
Employers’ National Insurance (NI) Increases
- Employer’s NI rate rising from 13.8% to 15%
- Threshold dropping from £9,100 to £5,000 per year (meaning you pay NI on more earnings)
Check your payroll software is up to date, and if you need a hand working out the impact on your business, just ask.
Need Help? Get in Touch
As always, if anything here affects you or your business, we’re happy to help. Just drop us a message or give us a call.
