Chancellor Rachel Reeves delivered her first Spring Statement on Wednesday 26 March 2025, keeping her promise of no major tax changes. But while tax remained steady, there were significant announcements on government spending, welfare reform, and future tax policy that will impact families, employers, and business owners alike.
Key highlights include:
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Government Spending: Extra funding for defence and housebuilding, plus a £3.25bn Transformation Fund to streamline public services. Welfare reforms will see tighter eligibility checks and changes to Universal Credit from 2026.
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National Insurance: Employer NICs will rise to 15% from April 2025. However, the Employment Allowance will increase from £5,000 to £10,500, and eligibility will be widened.
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Making Tax Digital (MTD): The rollout will expand gradually from 2026 to include more sole traders and landlords with income over £20,000 by 2028.
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Non-Domiciled Individuals: From April 2025, the remittance basis will be replaced with a residence-based tax regime. New arrivals will get four years of tax relief on foreign income and gains. Major changes are also coming to Inheritance Tax for non-doms.
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Capital Gains Tax (CGT): The basic CGT rate rises to 18%, and the higher rate to 24%, aligning more closely with property disposal rates. Business Asset Disposal Relief and Investors’ Relief will also see phased rate increases.
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Double Cab Pickups (DCPUs): From April 2025, DCPUs with a payload of one tonne or more will be treated as cars rather than vans for tax purposes. This affects capital allowances and benefit-in-kind calculations, with transitional rules in place.
Read our full blog post a ‘What Have You Done About the Tax Changes for Double Cab Pick-Ups?’
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Furnished Holiday Lettings (FHL): The FHL regime will be scrapped from April 2025, aligning tax treatment with other residential lettings and reducing available reliefs.
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Minimum Wage Increases: From April 2025, the National Living Wage rises to £12.21 for those aged 21+, and the 18–20 rate increases by 16.3% to £10.00 per hour.
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Private School Fees: VAT will apply to school fees from 1 January 2025 (or earlier for some prepayments made after July 2024).
Download our full Spring Statement Summary [PDF] for a detailed breakdown of all the announcements and what they might mean for you or your business.
Thanks The MGroup Team