What does it mean for your business?

When Chancellor Rachel Reeves sat down from the dispatch box after delivering her Spring Statement, it was markedly different from harsh emergency measures or surprise announcements to detract from the former that some might have anticipated.  

Instead, the focus was squarely on long-term structural reform, public sector efficiency, and maintaining fiscal stability, presenting a mixed picture for the UK’s small business community.

Rather than pulling rabbits from hats, this statement signalled a government digging in for the “hard yards” of economic restructuring especially over the next 18 to 24 months. 

So what do the specific announcements mean for business owners and directors?

Taxes: stability over relief (and watch out for HMRC tech)

Perhaps the most immediate headline for businesses is what wasn’t in the statement: further tax increases. In the current climate, this commitment to stability offers a degree of certainty. Businesses can plan finances without the looming threat of imminent hikes in Corporation Tax or other increases beyond what we already know are coming from April 6th.

However, the statement wasn’t entirely neutral on the tax front. The Chancellor highlighted a renewed focus on tackling tax evasion, explicitly mentioning the deployment of “cutting-edge tech” by HMRC to claw back an estimated £1 billion in arrears. 

While aimed at deliberate evaders, this often translates into increased scrutiny across the board. For diligent small business owners and their accountants, it underscores the ever-present importance of meticulous record-keeping and ensuring full compliance. An innocent mistake could become harder to resolve if HMRC’s systems and additional staff become more aggressive in their approach. 

And with compulsory liquidations reaching a monthly high not seen in over a decade in February, this should be expected. 

There were no announcements about further cuts or offsets to National Insurance beyond previous announcements, and no movement on the VAT registration threshold. 

While stability and clear communication is welcome, many businesses feeling the pinch might have hoped for more direct support to ease these cost pressures.

Spending shifting 

The Chancellor outlined some significant shifts in public spending, but the direct beneficiaries are largely within the state itself, not private contractors or businesses. 

Announced Plans include:

  • Increased Defence Spending: Funded partly through pre-trailed Welfare budget cuts.
  • NHS England Restructuring: Aiming for savings to fund patient care directly to further reduce waiting lists
  • Civil Service Cuts: Targeting a 15% reduction (a £2 billion saving) by the end of the decade.
  • A “Transformation Fund”: £3.25bn brought forward to invest in efficiency, including AI tools, probation service technology, and foster care support.

While the narrative centres on making government more efficient – which could theoretically lead to smoother interactions for businesses down the line – the immediate impact is minimal. There were no major new grant schemes or direct financial support packages announced for SMEs.

The statement did mention an average increase of £2 billion a year in capital spending, building on previously announced commitments. 

This could create downstream opportunities for businesses in construction, engineering, and other supply chains linked to public infrastructure projects. However, without specific project details, translating this into tangible business planning is difficult. 

The overall message is clear: this government’s current spending priority is reforming the state, not directly subsidising associated businesses.

The Economic Outlook: inflation easing but growth still a worry

The Office for Budget Responsibility (OBR) forecasts accompanying the statement offered some comfort on inflation, predicting it will average 3.2% this year before falling back towards the 2% target from 2027. 

For businesses grappling with high employment costs from increased employer National Insurance Contributions and a rising minimum wage, falling inflation is good news as it paves the way for more stable pricing and lower interest rates.

However, the growth forecasts remain stubbornly sluggish. The Chancellor acknowledged dissatisfaction with these numbers (“I am not satisfied with these numbers”). 

While mentioning levers like planning reform, potential deregulation, and major infrastructure projects (like Heathrow’s third runway and a new lower Thames crossing), the underlying message is that achieving robust growth will be a long, slow process. 

For small businesses, this continues to signal the need for continued resilience, careful cost management, and potentially conservative growth planning in the immediate short-term.

The Big Bet: planning reform for housing and growth

If there was a potential “rabbit out of the hat” announcement, it was the emphasis placed on planning reform. The OBR predicts these reforms could significantly boost GDP (by 0.4% or £15.1bn by 2030) and drive housebuilding to a 40-year high delivering 305,000 homes a year.

This holds genuine potential for SMEs working in specific sectors such as construction firms, tradespeople, material suppliers, architects, and estate agents.

They could all see a significant uptick in demand if these forecasts materialise.

Beyond the direct positive impact on the construction sector, streamlined planning could make it easier and cheaper for businesses in any sector to expand their premises or relocate to one more suitable. 

Furthermore, a substantial increase in housing supply could, over the longer term, help ease labour market pressures and potentially moderate wage inflation in high-demand areas. 

This remains a long-term promise, however, heavily dependent on effective implementation.

The Chancellor confirmed what every director and business owner knows, or should know, and that’s that collectively we’re in for a continuingly bumpy few months ahead economically. 

The good news is that no matter what actually happens between now and the end of 2025, there’s something you can do – right now – to improve the prospects for your company going ahead. 

That’s arranging a free initial consultation with us to discuss your current situation and what you can do to improve it. 

Once our advisors get a clearer picture of your unique circumstances then they will be able to give you some practical, realistic options about what you can do next.

Whether it’s strengthening your business to withstand any future turbulence or choosing to move onto your next professional venture sooner by closing your company efficiently, your best course of action is to get in touch so we can start to take the action that will make it happen.