UK Spring Statement – What it Means for Your Business
Wednesday 26th March, saw the release of the UK government’s Spring Statement. This announcement gave Chancellor of the Exchequer Rachel Reeves an opportunity to update the nation on progress made since the last budget in October 2024.
Yesterday’s statement was expected to provide headline announcements; however, it instead featured more discussions of existing plans and recapping of what’s to come.
We’ve noted the key aspects of the Spring Statement that will affect businesses and broken down what this means for you.
National Insurance Rates for Employers are Increasing:
As confirmed in the October budget announcement, employer National Insurance Rates are rising from April 2025. The rate will rise from 13.8% to 15% and the earnings threshold is planned to reduce from £9,100 to £5,000. This increase is anticipated to raise approximately £25 billion per year, representing one of the largest single tax increases in recent British history. Businesses should be aware of how this increase will affect them and the reduction in cash flow that will most likely come from this. There are, however, strategies that the Darcey Quigley & Co team can support with to boost cash flow.
No Additional Business Taxes:
There were no additional business taxes announced yesterday; however, HMRC has been given more funding to improve current systems. The government mentioned that business owners should expect increased focus on VAT, Corporation Tax and PAYE and digital accounting activities will be more closely watched. It is recommended that if your business is still following a more manual accounting approach that you begin reviewing digital systems.
Increase in National Minimum Wage and National Living Wage:
April 2025 will also see an increase in the National Minimum Wage and National Living Wage. This increase was announced in October to offset the increase in the current cost of living. Businesses will feel this impact on their bottom-line profitability especially at a time when margins are already tight. Ahead of this change, to improve cash flow businesses can seek support from the team at Darcey Quigley. Our commercial debt recovery experts can review your sales ledger to identify any invoices requiring attention, with the aim of recovering unpaid debts and boosting cash flow. Speak to a member of the team here.
To Conclude:
While the Spring Statement introduced no major new measures, businesses should remain proactive and prepare carefully for the upcoming tax year. Read more about what your business can do before the end of the tax year here. In addition, businesses must prepare for increased payroll costs, planning for the future and moving towards a fully digital accounting system.
Lynne is the Founder and CEO of Darcey Quigley & Co.
She is passionate and determined to help businesses get overdue invoices paid quickly.
Having worked within the credit management industry for over 27 years and ran UK leading commercial debt recovery specialists Darcey Quigley & Co for over 17 years, Lynne has helped businesses recover commercial debts from every continent across the globe.
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