There were no major surprises in the UK Spring Statement delivered by Chancellor Rachel Reeves this week (26 March) – but the big picture and a ‘changing world’ were very much the focus in a fiscal (non)-event that could pave the way for further changes later this year.
While this was not intended to be a major fiscal event, the Statement contained several important confirmations and new initiatives that will impact UK businesses. Measures announced focused on balancing fiscal responsibility with stimulating economic growth, which remains the government's “number one mission”.
The top considerations to emerge from the Statement for UK businesses include:
- Economic outlook and fiscal strategy: The Chancellor emphasised that “the world has changed" since her first budget five months ago, attributing the need for cuts and downgrades to global challenges. She stressed the government's commitment to "securing Britain's future” in a rapidly changing world.
- Welfare reforms and budget cuts: Reforms were announced to the welfare system, with the Chancellor stating that the government will “make it more sustainable, protect the most vulnerable and support people back into work”. She confirmed that overall cuts and changes to welfare will reduce the budget by £4.8bn.
- Defence spending: Reeves confirmed an additional £2.2bn for the Ministry of Defence next year, as part of the UK's move towards spending 2.5% of GDP on defence by April 2027.
- Government cost reduction: Whitehall departments are being ordered to reduce their administrative costs by 15% by 2030, with at least ten thousand jobs set to be cut.
- Crackdown on promoters of tax avoidance: In conjunction with the Spring Statement, the government launched four consultations on “Closing in on Promoters of Marketed Tax Avoidance”. This consultation seeks views on proposals to give HMRC additional powers and stronger sanctions against promoters of tax avoidance schemes.
Key areas of focus include how HMRC can make better use of third-party data to increase automation and close the tax gap, proposals to strengthen HMRC’s ability to take action against those tax advisers who facilitate noncompliance from their clients, a comprehensive package of measures to close in on promoters of marketed tax avoidance, and options to simplify and strengthen HMRC’s inaccuracy and failure to notify penalties. The consultation runs from 26 March 2025 to 18 June 2025.
Commenting on the Spring Statement, Peter Fenyves, Hawksford Business Development Manager, said:
“While there were no major surprises in this Spring Statement, Rachel Reeves did use it to reaffirm her commitment to her fiscal rules, describing them as “non-negotiable”, while she also referred to the government's ‘unwavering commitment’ to bring stability to the UK economy against a volatile macro environment and to ensure security for working people. In tandem with the consistent focus on the changing world around us, this very much felt like preparation for further announcements in the next actual fiscal event in autumn.
“Perhaps of most interest was the clear focus on tackling tax avoidance and ensuring a fair and competitive business environment. Businesses need to be aware of these proposed measures and ensure they are absolutely clear on and in compliance with the rules.”
The Spring Statement is available in full here.
Speak to our experts today
Understand how these changes impact your business. Contact us today.
