Stairway Structure
Insights

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.

Winding road
1

Spring Statement 2025 – what we could expect

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. But spending cuts alone are unlikely to raise the funds that the Chancellor needs, so will she be tempted to reconsider her pledge not to raise taxes any further?

Below, we look at the potential areas of tax policy that the Chancellor could revisit and reconsider, in order to incentivise investment by people and businesses, to help boost the economy.

Fog in the sky
Revisiting tax measures

Tax measures the Chancellor could revisit to drive economic growth

Despite pledging not to touch income tax, NI or VAT, changing thresholds is still technically an option and could raise considerable amounts of tax."

Sun at dusk with mountains
Predictions

Clues from the Autumn Budget

Watch this exclusive extract from our recent FD Update, exploring key measures announced in the Autumn Budget but not enacted, upcoming tax policy consultations, and some interesting insights from recent case law – could these elements hold clues to predicting what the Spring Statement may bring?
Play

Pre-order your exclusive Spring Statement Summary and Tax Data Card now!

Pre-order today
White cliffs
2

Economic Perspective

The Chancellor has had her fiscal headroom of an estimated £9.9bn wiped out by the combination of higher borrowing costs and flatlining growth - as a result, we can expect to see substantive measures announced by the Government on, and in the lead-up to, 26th March.

Professor Joe Nellis, Economic Adviser to MHA

Joe Nellis edit
Surfing on a wave
Driving growth

A shifting economic landscape offers the Chancellor 3 key options to drive growth

3 key options to turn the economy around:

1. Change the fiscal rules to allow greater investment

2. Indirectly raise taxes

3. Cut spending to fill the fiscal gap

White cliffs
Fears of "stagflation" growing

Are concerns over inflation and a stagnated economy warranted?

A shifting economic landscape has led to:

UK Pound

£9.9bn estimate fiscal headroom wiped out

Graph down

2025 GDP growth forecast slashed from 1.5% to 0.75%

Pillars

Inflation projected to remain above 2% until 2027

Lake and mountains
3

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.

This reflects the concern over the tax measures announced and their wide-ranging impact on the UK economy, with individuals and business owners alike being affected.

Refresh your memory of the key changes announced with the specially curated insights below from our tax and industry specialists.

Circle waves in ocean
Recap | At a glance

15 Key Points from Autumn Budget 2024

Dan freeman WH Psxh B4m WQ unsplash
Recap | In-depth analysis

Autumn Budget 2024

Sunset over mountains
Autumn Budget 2024

Key Tax & VAT Changes

We review the bombshell tax changes announced for businesses and individuals, and debate whether these changes are enough to bring stability, and encourage investment, back to the UK.
Play
MHA can help you navigate the ever-evolving tax landscape

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.