Chancellor Rachel Reeves delivered the Spring Statement 2025 on the 25th March, amidst a political and economic climate that remains complex and uncertain for UK businesses. The Spring Statement was the first of its kind under the recently elected Labour government, and a highly anticipated follow-up to this government’s first budget delivered in October of last year.
While not a full Budget, the Spring Statement offers useful insights into how things have been going since the Autumn Budget and introduces several additional measures that businesses must take note of. From tax cuts and investment incentives to changes in rates and allowances, the Chancellor’s statement clearly outlines where opportunities lie and, perhaps more importantly, where costs may rise for business owners.
In this article, we have summarised the key takeaways from the Spring Statement 2025 and what they might mean for you.
1. Corporation Tax Frozen
One of the major takeaways of the Spring Statement 2025 is that the main rate of Corporation Tax will remain at 25%. There has been much speculation that this rate would rise, so the confirmation of a rate freeze should provide some continuity and reassurance for business owners planning for the near future. However, we do expect further Corporation Tax reviews to form part of the government’s plans for the Autumn Budget later in the year.
2. Consultation On Advance Clearances For R&D Tax Relief
The Chancellor also announced that HMRC has launched a consultation to explore the expansion of advance clearances for Research & Development (R&D) tax relief claims. Currently, advance assurance is available to first-time claimants with a turnover below £2 million and fewer than 50 employees.
The consultation, which runs until the 26th May 2025, will explore options for a new clearance scheme aimed at reducing error and fraud and providing greater certainty for businesses. It’s well worth exploring further and contributing to the consultation process if you have plans to use the R&D tax relief scheme and want to stay informed about future developments.
3. No Business Rates Reform Just Yet
In the Autumn Budget, the Chancellor announced that the government would extend the 75% business rates relief for eligible retail, hospitality, and leisure businesses, up to a cap of £110,000 per business.
However, there has also been ongoing pressure from businesses in these sectors for further reform and certainty regarding business rates. The Spring Statement 2025 confirmed that the 75% business rate relief will indeed be in place for the 2025-2026 tax year, but delayed any wider business rate reform until 2026. This announcement will provide some reassurance for those affected in the short term, but it is also important to be mindful of how rates may change as you plan beyond this year.
4. No Changes To VAT Registration Threshold
In 2024, the VAT registration threshold was increased from £85,000 to £90,000. This was the first rise of its kind since 2017, aimed at reducing the administrative burden and costs associated with VAT registration for businesses.
The Spring Statement confirmed that, like Corporation Tax, there will be no further changes to the VAT threshold of £90,000 this year.
5. HMRC To Crackdown On Late Payments
The Spring Statement also contained new measures to address the significant gap between tax owed and collected by HMRC. As of April 2025, HMRC has increased its penalties for late filing of self-assessment tax and VAT returns, up to a range of 3-10%, with fines increasing by around 6%. HMRC also plans to employ more private debt collectors and staff to recover withheld taxes and generate an extra £1 billion in revenue over the next four years.
If your business is concerned about the implications of these crackdowns and is struggling to make timely payments to HMRC, now is the time to act accordingly and seek reliable advice.
Next Steps For Business Owners
The Spring Statement has brought a range of new opportunities and responsibilities for business owners, and being mindful of these as you plan for the future is key. While continued reliefs and stable rates are good news, stricter rules from HMRC and the possibility of future tax hikes mean it’s more important than ever to have your financial affairs in order.
If you’re unsure how these measures apply to your business or you’re facing pressures around costs, there is still time to act and adjust. At Ballard Business Recovery, we can provide expert business advisory and restructuring services to help you navigate this period of change with confidence. Whether you need to re-evaluate your structure or prepare for the future, get in touch with our team today to secure the right guidance.
