Spring Statement 2025 – tax reforms back in the spotlight?
Stay informed on the latest developments
On Wednesday 26 March, Chancellor Rachel Reeves will hold her first Spring Statement.
Committing to a single “fiscal event” per year, the Chancellor will be planning to use her Statement to provide an update on the government’s tax and spending plans, accompanied by a fiscal forecast from the OBR.
However, it’s unlikely to be that simple - the fallout from tax and spending measures announced in the Autumn Budget, combined with recent global developments, has resulted in increased government borrowing and weakened growth prospects. This in turn has led to speculation that a backtrack on some key proposed measures from the Chancellor is on the cards, when she announces her Spring Statement later this month.
What can we expect from the Spring Statement 2025?
The lack of growth and increase in borrowing costs has wiped out much of the Chancellor’s fiscal headroom, so something must be done to continue funding current expenditure. Whilst tax rises could provide these funds, this is unlikely.
It is far more likely that the Chancellor will be forced to reverse her previous spending commitments and make the unenviable decision of prescribing tighter government spending.
Clues from the Autumn Budget
Economic Perspective
Professor Joe Nellis economic perspective
"Our Economic Adviser Professor Joe Nellis provides his insights into the future of the UK economy, and what the Chancellor needs to focus on to boost growth and mitigate the impact of global developments."
Professor Joe Nellis, Economic Adviser to MHA
Fears of stagflation unfounded
Fallout from the Autumn Budget 2024
With a promise to grow the economy and create wealth and opportunity for all, the Autumn Budget 2024 aimed to restore economic credibility and stability to public finances.
However, it seems measures announced in the Budget have not helped the Governments’ intended push for growth. Whilst measures won’t come into effect until April, businesses have already been making decisions to preempt the impact of the increases in employer NICs and the minimum wage, leading to decreased investment.
The Spring Statement 2025 may bring additional wide-ranging impacts on industries and businesses across the UK. Our tax experts and industry specialists will be happy to help you adapt and reassess your financial plans in the light of any tax cuts and legislative changes arising from these fiscal announcements.
Contact your usual MHA adviser or your nearest office for guidance on the measures announced or to discuss other tax matters, and we will be happy to assist with any queries.
