Spring Statement
What the Spring Statement 2025 means for your business
The Chancellor’s Spring Statement the other day set out a mixed picture for UK businesses. With slower growth on the cards, rising costs for employers, and tighter tax rules, it’s clear the coming year will demand sharp thinking and strong planning. But it’s not all bad news – investment in housing and skills could open up new doors in the months ahead.
Here’s what you need to know – and what your business should do next.
Slower growth forecast - what it means for your bottom line
The UK’s growth forecast for 2025 has been halved from 2% to 1%. This signals a slowdown in the economy, and that will affect many parts of business – from how much customers are willing to spend to how confidently suppliers and lenders behave.
You may see weaker demand, especially in sectors tied to consumer spending. Now’s the time to keep a close eye on your margins, cash flow, and working capital. Think about ways to make your operations leaner or more flexible, just in case demand dips more than expected.
Wage changes - how to plan for higher payroll costs
From 1 April 2025, the National Living Wage will rise by 6.7%. That’s a big jump – and it will hit hardest in sectors like retail, care, cleaning, and hospitality.
Do you have several employees on lower pay rates? Then, your wage bill will go up. Review your payroll forecasts now and look at how this affects your pricing, staffing levels, or shift patterns. It may also be a good time to rethink how you reward and retain key staff, especially if you’re competing with others for talent.
New tax clampdowns - time to tighten your records
The government is giving HMRC an extra £100 million to hire 500 new compliance officers and expects to recover £241 million from unpaid tax over the next five years.
That means more checks and less leniency. From April 2025, late payment penalties for VAT and Self-assessment will also rise.
Now’s the time to check your books. Make sure you’re on top of all tax deadlines, and keep clean, up-to-date records. If you do your own accounts, talk to your accountant about staying compliant and avoiding fines.
Cuts to public spending - indirect effects on your business
Welfare cuts of £4.8 billion by 2030 could hit household incomes, especially for those on Universal Credit or Personal Independence Payments (PIP). The OBR says this may push 250,000 people into poverty – including 50,000 children.
Why does this matter to your business? If your customers include lower-income households, you may see them cutting back on non-essentials. This could hit retail, food, leisure, and other service-based sectors.
Civil service jobs are also being cut – around 10,000 roles. If you work with public sector clients or depend on government contracts, this could mean delays or funding changes.
Investment in skills and housing: potential for growth
The statement wasn’t all about cuts. There are signs of future opportunities – especially in construction and housing.
- £600 million will go into training 60,000 new bricklayers, electricians, engineers, and carpenters
- £2 billion is being spent on 18,000 new social and affordable homes
- The government wants to reach 305,000 new homes a year by 2030
Is your business in construction, property, building supplies, trades, or training? Then, this could bring a welcome boost. Even if you’re not in those sectors, extra housing could drive demand for everything from removals and furniture to broadband and local services.
What’s missing?
While the Chancellor spoke about investment, there were no headline tax cuts for businesses.
- Corporation tax remains at 25% for profits over £250,000
- Income tax thresholds are still frozen until April 2028 – meaning your employees may pay more tax as wages rise, even if the rates stay the same
Both will add to the pressure on payroll and take-home pay, which could affect staff morale and retention. It’s worth considering how you support and communicate with your team, especially if pay rises don’t stretch as far.
What should your business do next?
With pressures rising and growth slowing, your business will need to stay sharp and adaptable.
- Review your costs and pricing – especially wages, tax, and supplier terms
- Tighten up your tax records – and avoid any risk of late filing or penalties
- Look for opportunities – especially in housing, construction, and training
- Support your team – rising living costs and frozen thresholds will hit take-home pay
Need help making sense of it all?
If you’re not sure how these changes affect your business, speak to us. We’ll help you plan ahead, stay compliant, and spot the opportunities hidden in the detail.
All these are our speciality. We’re always here to help.