The Chancellor of the Exchequer delivered her Spring Statement 2025 to Parliament on 26 March 2025 and vowed to bring about a ‘new era of security and national review’.
The statement may bring disappointment to business owners and tax payers alike who were hoping for a retraction of employer’s national insurance hikes and inheritance tax revisions.
We recommend maintaining an awareness of the Autumn Budget 2024 announcement as there haven’t been any significant revisions or tax highlights in the latest Spring Statement 2025.
The focus of the Spring Statement was on closing the tax gap as the Chancellor is relying heavily on tax revenues to help balance the books, investing in additional compliance staff and technology to increase collection of taxes and reduction in error and fraud.
Here’s a Reminder of the Autumn Budget Highlights:
- Employer’s National Insurance:
- an increase in rates from 13.8% to 15% from 6/4/25
- a reduction in the threshold from £9,100 to £5,000 per annum
- an increase in the employers allowance from £5,000 to £10,500 – allowing some businesses to offset their additional costs
- Inheritance Tax: Business & Agricultural Relief is to be halved to 20% on qualifying assets exceeding £1m and on AIM shares.
- Pension for Inheritance Tax: There is a consulation ongoing to bring Pensions inside the remit of an estate for inheritance tax.
- Capital Gains Tax: rates have been increased to 18% and 24%
- Business Asset Disposal Relief (Previously Entrepreneur’s Relief): increased from 10% to 14% from 6 April 2025 and plans to increase again to 18% in 2026.
Spring Statement 2025: Tax Insights
- Personal tax thresholds will remain frozen until April 2028 (instead of the previously mentioned April 2026). Previous budgets had seen these risen in line with Consumer Price Indexes, but the freeze is expected to raise over £1.2 billion in taxes by April 2028.
- Inheritance Tax Threshold Frozen until 2030: the threshold remains at £325k (plus £175k additional for the family home if you have children).
- Stamp Duty Land Tax Cuts still to end on 31 March 2025: the markets forsee that this could lead to a reduction in interest rates as its likely affordability will drop as deals won’t make the end of March deadline!
- New investment in HMRC’s technology to crack down on tax evasion: Reeves vowed to collect an additional £7.5 billion a year through new tax avoidance crackdowns.
- Changes to High Income Child Benefit Regime: From Summer 2025 the High Income Child Benefit Charge (HICBC) can be paid by employed parents through PAYE, removing the need to register for Self Assessment.
- Review of ISAs: Ongoing review of reforms to Individual Savings Accounts to get the balance right between cash and equities (there had been rumours that the £20,000 annual investment limit would be cut to just £4,000).
- New consultation on advance clearances for R&D tax relief: the consultation is exploring options to reduce error and fraud.
- Consultation on improving the quality of data acquired by HMRC for gathering tax: this will likely help HMRC crackdown on further tax avoidance as they continue to strengthen partnerships with third parties to collect data.
- Continued expansions to Making Tax Digital: HMRC expects to improve the tax system through Making Tax Digital.
- HMRC review how they apply penalties based on behaviour: Consultation on strengthening HMRC’s penalties regime for inaccuracies and failures to notify.
Spring Statement 2025: Spending Insights
- Inflation is expected to fall to 2% by 2027, however the Office for Budget Responsibility expect this to be at 3.2% this year.
- £3.25 billion dedicated transformation fund to reduce the ongoing costs of government, through voluntary exit schemes for civil servants
- Defence Spending
- £2.2 billion to be spent on defence from existing reserves
- UK defence innovation fund of £400 million for the Ministry of Defence
- Regeneration of Portsmouth naval base, £98 million has already been invested
- State Pension Triple Lock: 4.1% increase in April 2025, which will also see Pension Credit rise by the same amount.
- Welfare budget cuts see a net £3.4 billion cut as the government change the benefits regime
- Other Investments:
- £600 million to be invested in training for up to 60k new construction workers
- £2 billion investment in social and affordable housing
How Can Brisan Support?
While these Spring Statement changes are set in stone, your financial future doesn’t have to be uncertain. At Brisan, we transform complex tax updates into clear opportunities for your business.
Our expert team doesn’t just explain what’s changing, we proactively identify how these changes impact your tax exposure, uncover potential savings, and develop strategic plans to keep you ahead of the curve.
We’re here to ensure you’re not just informed, but empowered to make confident financial decisions. Let’s turn these tax changes into a roadmap for your business success, reach out to us for clarity.
