As the Spring Statement approaches, many are left wondering if the Chancellor will u-turn this spring? The pressure is mounting on Reeves following a tumultuous Autumn Budget that left both businesses and economists scratching their heads ...
The wait for the Spring Statement may soon be over, but uncertainty very much remains!
Concerns from various sectors, especially the hospitality industry, are bubbling to the surface. Farmers protested vehemently over reduced Agricultural Property Relief (APR), while numerous businesses voiced unease over the forthcoming increase in employers' National Insurance contributions (NICs).
"Reeves recently announced that the Spring Statement will take place on the 26th of March 2025!"
The Autumn Budget stirred significant disappointment when it was revealed that the employers' NICs rate would escalate from 13.8% to 15%, effective from the 6th of April 2025. Notably, there will also be a reduction in the secondary threshold for employers from £9,100 to £5,000 annually, a move that has infuriated businesses across the board.
This new threshold will be in place until the 6th of April 2028, at which point it will be adjusted based on Consumer Price Index (CPI) movements, further complicating the financial landscape for many businesses.
Given the Office for National Statistics reports of stagnation in economic growth following the Labour Party's election victory, the chancellor finds herself in a precarious position!
With zero growth reported for Q3 of 2025, my own thoughts are that pressure is mounting for Reeves to reconsider her NICs policy. We all know that the economy is in a fragile place right now and is in dire need of growth less we fall into a recession which would really put the cat amongst the pigeons.
Concerns about economic stability echo through the business community, with a recent survey from the British Chambers of Commerce (BCC) revealing that two-thirds of enterprises are anxious about rising tax rates.
This sentiment marks the highest level of tax concern since 2017, suggesting that confidence is at an all-time low. From talking to my own clients, I know that businesses are trapped between a rock and a hard place right now. Do they lay people off to reduce costs or put their prices up to cover the NIC increases?
"So, will Reeves announce a u-turn this spring?"
As we prepare for what is sure to be a critical address, all eyes will be on the Chancellor to see if she can steer the economy towards a more prosperous path or if further measures are necessary to restore confidence.
The wait for the Spring Statement may soon be over, but uncertainty very much remains.
Until next time ...
ROGER EDDOWES Business Godparent
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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