In July 2024, Chancellor Rachel Reeves signalled a shift in governmental financial communications, promising a more streamlined approach with just one major budget-type event per year. The 2025 Spring Statement demonstrated this commitment, departing from the traditional iconic red box photo opportunity and major tax announcements.
Economic Context
However, as the nation grapples with sluggish growth, borrowing costs rising and ironclad fiscal constraints, all eyes were on the Chancellor’s plans to steer the economy toward stability and renewal.
For a detailed examination of the Spring Statement’s implications, download our DJH Spring Statement Report 2025.
Key highlights
While the Spring Statement maintained a tapered approach, several critical developments emerged that businesses must carefully consider:
HMRC investigations to increase
The Chancellor reaffirmed her commitment to supporting taxpayers by targeting those who avoid paying their fair share. She announced a target to increase tax evasion charges by 20%, potentially raising £7.5 billion annually, providing HMRC the funding they need to hit this target.
Of course, this will mean a vast increase in tax investigations to attempt to maximise the tax it can recover.
It’s important to understand that anyone can be investigated, even if you haven’t done anything wrong. That’s why we always recommend having tax investigation protection. Whether it’s a PAYE or VAT visit, a technical enquiry or a full-blown books and records enquiry, our tax investigations service is designed to get you the best result.
If you’re a client of DJH, please speak to your advisor about this today to ensure you’re covered for the new financial year.
MTD changes
With Making Tax Digital starting from April 2026 for sole traders and landlords with qualifying incomes over £50k, and over £30k from April 2027, it was confirmed as part of the Spring Statement that this would extend again, to those with incomes over £20,000 from April 2028.
R&D advance clearances
A consultation period on advance clearances for R&D tax reliefs has been confirmed. Its goal is to reduce errors and fraud, provide applicants with greater certainty, and enhance the overall claiming experience. The consultation will explore the best ways to design a system to achieve these objectives.
No changes off the back of the Autumn Budget
With a recent Office for National Statistics (ONS) study finding that half of businesses are considering price rises to combat the Employer National Insurance Contribution (NIC) changes and National Minimum Wage (NMW) increases, some predicted an increase in the Employment Allowance or relief for certain sectors.
There were also suggestions that Business Property Relief (BPR) and Agricultural Property Relief (APR) may be under consideration to soften the blow for business owners, and farmers, along with Cash ISAs having their annual limit reduced to encourage investment in stocks.
However, neither was touched upon in the Statement, with the Chancellor keeping her word on only having one major announcement this year.
Final thoughts
The Spring Statement reveals a delicate balancing act – managing economic challenges while maintaining fiscal responsibility. While growth remains minimal and challenges persist, the Chancellor states that her outlined strategies will aim to provide stability and incremental progress.
