2025 Spring Statement at a Glance

by | Apr 1, 2025 | Company News

Chancellor Rachel Reeves has delivered her first Spring Statement to Parliament, building on the £40 billion tax-raising measures introduced in the Autumn 2024 Budget. Below are the key announcements that may be of interest to you.

Economic Forecasts

  • Predicted Growth – the Office for Budget Responsibility (OBR) has downgraded predicted growth for this year, from 2% to 1%
  • Estimated Growth – the OBR has upgraded estimated growth for the next four years to 1.9% in 2026, 1.8% in 2027, 1.7% in 2028 and 1.8% in 2029
  • Inflation – to average 3.2% this year, up from 2.6% previously forecast, before falling back to 2.1% in 2026. Expected to hit the government’s target of 2% from 2027

Welfare

  • Universal Credit Standard Allowance – to increase from £92 per week in 2025/26 to £106 per week by 2029/30
  • Universal Credit Health Element – to be cut by 50% from April 2026 and frozen for claimants until 2030
  • Personal Independence Payments (PIPS) – stricter eligibility test for the main disability benefit, from November 2026
  • Incapacity Benefits – to be frozen for existing claimants at £97 per week from April 2026
  • Social and Affordable Housing – £2bn investment
  • State Pension Triple Lock – 4.1% increase in April 2025
  • Pension Credit – will also rise by 4.1%

Defence

  • UK’s Defence – an extra £2.2bn promised over the next year, to reach the government’s new target of 2.5% of GDP by April 2027 and help pay for new technologies, such as long-range laser weapons and Artificial Intelligence
  • HM Naval Base Portsmouth – to be upgraded
  • Military Housing – homes for military families will be refurbished, including the 36,000 recently brought back into public ownership from the private rented sector
  • Overseas Aid – will be reduced to 0.3% of GDP, saving £2.6bn by 2029/30

Investment

  • £3.25bn Transformation Fund – to bring down the costs of running government (e.g. voluntary exit schemes from the Civil Service)
  • Heathrow Airport – confirmed backing for a third runway
  • Planning Reforms – resulting in housebuilding reaching its highest level in over 40 years
  • New Construction Workers – £600m to train 60,000 workers

Taxes

  • HMRC’s Technology – new investment, to crack down on tax avoidance
  • Thresholds and Allowances – continue to be frozen, to keep the tax burden at a 70 year high (37.7% of GDP)
  • High Income Child Benefit Charge (HICBC) – from Summer 2025 this can be paid by employed parents through PAYE, removing the need to register for self-assessment
  • Making Tax Digital (MTD) – will come into effect from April 2026 for property landlords and sole traders whose turnover exceeds £50,000 and from April 2027 where it exceeds £30,000. Those whose turnover exceeds £20,000 will need to register and comply with MTD from April 2028
  • Research & Development (R&D) – the government is launching a consultation to seek views on clearances regarding R&D tax reliefs

The full publication can be found on the GOV.UK Website

To discuss the 2025 Spring Statement, or the accountancy and tax support you need, please call our friendly team on 01249 712074 or email theteam@cvag.co.uk