[{"id":13561,"date":"2025-03-26T16:34:28","date_gmt":"2025-03-26T16:34:28","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=13561"},"modified":"2025-03-27T11:38:28","modified_gmt":"2025-03-27T11:38:28","slug":"spring-statement-2025-our-summary-for-smes","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/spring-statement-2025-our-summary-for-smes\/","title":{"rendered":"Spring Statement 2025: Our summary for SMEs"},"content":{"rendered":"
Chancellor Rachel Reeves delivered the Spring Statement 2025 on 26 March. While it\u2019s not a full Budget, this mid-year update gives a snapshot of the UK\u2019s finances and sets the tone for future tax and government spending decisions.<\/p>\n
With the pressure of low economic growth, the Chancellor outlined spending cuts to fill the \u00a315bn fiscal hole compared to the plans she announced in the Autumn Budget. Reeves emphasised the government is \u201con the side of Britain\u2019s working people, working in their interest\u201d and did not place UK businesses at the core of her speech.<\/p>\n
However, there are still important economic updates to be aware of. Here are the key points covered in the Spring Statement and what they mean for businesses like yours.<\/p>\n
The point of this Spring Statement, ultimately, was to outline the economy\u2019s health. Real gross domestic product (GDP) growth has fallen short of expectations. It is now forecast at 1% for 2025, down from the 2% initially predicted by the Office for Budget Responsibility (OBR) at last autumn\u2019s government budget.<\/p>\n
However, inflation measured by the Consumer Prices Index (CPI) fell to 2.8% in February 2025 from 3% in the 12 months to January 2025. Also, real household income will grow this year at twice the rate expected in autumn and household disposable income is expected to grow. After taking into account inflation, the OBR stated today that people will be over \u00a3500 a year better off on average under this Labour government.<\/p>\n
Typically, when the economy is lagging, consumers tend to cut back on spending \u2013 especially on non-essential goods and services. However, with CPI falling and household disposable income growing, business owners can hopefully look forward to consumer confidence improving in 2025.<\/p>\n
The government\u2019s spending changes announced today intend to balance the budget and grow the economy over the coming years. The Chancellor reports:<\/p>\n
“I can confirm to the House that the OBR have [as a result of reforms announced today] upgraded their growth forecast next year and every single year thereafter, with GDP growth of 1.9% in 2026, of 1.8% in 2027, 1.7% in 2028 and 1.8% in 2029.”<\/p>\n
Reeves concludes: \u201cThere are no quick fixes, but we have made the right choices to return stability to our economy after years of mismanagement by the party opposite, delivering security for our country and security for working people.\u201d<\/p>\n
If these forecasts are met, it could create a more stable long-term environment for business planning, investment, and sustainable growth.<\/p>\n
The government announced it will support the construction industry by investing \u00a3100 million in 35,000 additional training places in construction-focused Skills Bootcamps. This will benefit trainees, \u2018returners\u2019, and existing employees.<\/p>\n
Important dates for UK business owners in 2025<\/span><\/a>\n Self Assessment – 16 common questions answered\u00a0<\/span><\/a>\n The Worker Protection Act: a brief guide for employers<\/span><\/a>\n <\/p>\n Additionally, the government will provide a further \u00a340 million to support up to 10,000 more young people to access new construction Foundation Apprenticeships, enabling more young people to enter the industry and address skills shortages.<\/p>\n Though the Chancellor did not mention the new policies and taxes taking effect next week in her speech, they are significant to businesses’ financial outlook. Here are the five key changes to keep in mind:<\/p>\n For more details on what\u2019s changing for the 2025\/26 tax year, read our blog ‘2025-26 tax year \u2013 what UK business owners can expect<\/a>‘.<\/p>\n Many entrepreneurs had hoped the Chancellor would signal more support towards businesses and put their needs at the core of the country\u2019s economic recovery.<\/p>\n SMEs are about to deal with significant rises in costs this April due to employers\u2019 National Insurance contributions rising by 1.2% and increases in statutory wage rates. Dext<\/a> research shows that as a result, a third of business leaders are losing sleep over concerns about affording their payroll costs, and the Companies House register shrank between October and December 2024 for the first time since quarterly records began in 2012.<\/p>\n Graeme Donnelly, founder and CEO of 1st Formations, provided his analysis of today\u2019s events.<\/p>\n This Spring Statement fell short of what businesses need. Rather than laying the groundwork for growth, it offered little in the way of direct investment. SMEs drive the UK economy, generating over \u00a32.4 trillion in turnover and employing 60% of the private sector workforce. Yet, the government is not prioritising them. Since the Autumn Statement, 24% of small businesses have cancelled hiring plans<\/a>, and 16% have been forced to cut employee hours. If the UK economy is to recover and grow, SMEs need better, more targeted support.<\/p><\/blockquote>\n Although businesses were not at the centre of this Spring Statement, we hope a positive economic outlook will benefit the UK business landscape over the longer term.<\/p>\n Stay tuned for our coverage of the Autumn Budget in October, as we anticipate there will be more substantial tax and policy changes.<\/p>\n Chancellor Rachel Reeves delivered the Spring Statement 2025 on 26 March. While it\u2019s not a full Budget, this mid-year update gives a snapshot of the UK\u2019s finances and sets the tone for future tax and government spending decisions. With the pressure of low economic growth, the Chancellor outlined spending cuts to fill the \u00a315bn fiscal…<\/p>\n","protected":false},"author":28,"featured_media":13562,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[1239],"tags":[],"class_list":["post-13561","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-accounting-finance","category-1239","description-off"],"acf":[],"yoast_head":"\n Whether you\u2019re self-employed or running a limited company, there are several changes to be aware of in the 2025-26 tax year \u2013 from employer National Insurance contributions and minimum wage rates to company size thresholds and Capital Gains Tax.<\/span>\u00a0<\/span><\/p>\n Here\u2019s a summary of what you can expect as a UK business owner. Most changes will take effect on 6 April 2025, the first day of the new tax year.<\/span><\/p>\n <\/div>\n <\/div>\n \n Many changes in the 2025-26 tax year will directly impact employers, the most notable of which relate to secondary Class 1 NICs. <\/span>\u00a0<\/span><\/p>\n From 6 April 2025, the following <\/span>changes to employer NICs<\/span><\/a> will take effect:<\/span>\u00a0<\/span><\/p>\n However, it\u2019s not all doom and gloom. The government will also increase the maximum Employment Allowance by 110%, from \u00a35,000 to \u00a310,500 per year, and remove the \u00a3100,000 eligibility cap. These two measures are designed to help smaller employers by providing more relief on their secondary National Insurance liabilities.\u00a0<\/span><\/p>\n The NIC Lower Earnings Limit and Small Profits Threshold determine when an employee or self-employed <\/span>individual<\/span> qualifies for contributory benefits, including the State Pension.<\/span><\/p>\n From 6 April 2025, the following changes will take effect:<\/span>\u00a0<\/span><\/p>\n Employees (including company directors) and self-employed individuals must earn at least the LEL or SPT to have their NICs \u2018treated as paid\u2019 and to be eligible for contributory benefits. They don\u2019t need to pay NICs until their earnings exceed \u00a312,570 annually.<\/span><\/p>\n The annual increase to <\/span>National Living Wage and National Minimum Wage<\/span><\/a> rates will take effect from 1 April 2025. The changes to hourly pay rates are as follows:<\/span>\u00a0<\/span><\/p>\n These changes will benefit many UK workers, but they may present additional challenges to employers at a time of increasing National Insurance liabilities.\u00a0<\/span>\u00a0<\/span><\/p>\n Statutory pay rates for employees will also rise at the start of the 2025-26 tax year. The changes <\/span>from 6 April 2025<\/span> are as follows:<\/span>\u00a0<\/span><\/p>\n From 6 April 2025, employees will also have a \u2018day one right\u2019 to <\/span>neonatal care leave and pay<\/span><\/a>. This new measure supports working parents with babies in neonatal care. It will provide eligible employees additional time off and Statutory Neonatal Care Pay of \u00a3187.18 per week. <\/span>\u00a0<\/span><\/p>\n Important dates for UK business owners in 2025<\/span><\/a>\n The Worker Protection Act: a brief guide for employers<\/span><\/a>\n Tax-efficient life insurance through a limited company<\/span><\/a>\n <\/p>\n The government will also increase Small Employers<\/span>\u2019 <\/span>Relief from 103% to 108.5%. This will enable smaller employers to recover 100% of employees\u2019 Statutory Maternity, Paternity, Adoption, Parental Bereavement, Shared Parental, and Neonatal Pay \u2013 plus an additional 8.5% compensation.\u00a0<\/span>\u00a0<\/span><\/p>\n Employers that are not eligible will be able to reclaim 92% of statutory payments instead.\u00a0<\/span><\/p>\n Due to the government\u2019s <\/span>triple lock system<\/span><\/a>, pensioners will receive a 4.1% increase to their <\/span>State Pensions for the 2025-26 tax year<\/span><\/a>. The rates will change as follows:<\/span>\u00a0<\/span><\/p>\n These increases will provide recipients of the new State Pension with an additional \u00a3470 per year, while recipients of the basic State Pension will receive an extra \u00a3361 per year.<\/span><\/p>\n The turnover thresholds for micro, small, and medium-sized companies will increase from 6 April 2025, per <\/span>The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024<\/span><\/a>. There are no changes to the monetary size thresholds for large companies or the average number of employees for any company size.<\/span>\u00a0<\/span><\/p>\n The table below shows the thresholds for accounting periods beginning on or after 6 April 2025.<\/span>\u00a0<\/span><\/p>\nReminder: changes coming in April 2025<\/h3>\n
\n
UK businesses\u2019 sentiment on the Spring Statement 2025<\/h3>\n
\n
\n <\/a>\n <\/div>\n \n"},"excerpt":{"rendered":"
\n Key Takeaways<\/span>\n <\/h3>\n
\n
\n
\n
1. Employer National Insurance contributions (NICs)<\/h3>\n
\n
2. NIC Lower Earnings Limit and Small Profits Threshold<\/h3>\n
\n
\n <\/a>\n <\/div>\n \u00a0<\/span>\u00a0<\/span><\/p>\n
\n
3. Minimum wage increases<\/h3>\n
\n
4. Increases to statutory payments for employees<\/h3>\n
\n
5. Annual increase to State Pension<\/h3>\n
\n
6. Changes to company size thresholds<\/h3>\n