Chancellor Rachel Reeves is set to deliver the Spring Statement on 26 March 2025. While the government assured us last autumn that no new tax hikes would be introduced this spring, there’s a growing sense that some adjustments might be on the horizon. With economic uncertainty both at home and globally, a little fine-tuning could be on the cards to keep things steady.A second fiscal event – But how big?Reeves has committed to just one major fiscal event per year. However, given that the Autumn Budget 2024 introduced a staggering £40bn in tax rises, any additional announcements in March will be closely scrutinised. While it may not be as significant as the Autumn Budget, the Spring Statement still provides an opportunity to introduce further tax changes or modify controversial measures from last year.At a recent CBI conference, Reeves initially ruled out further large-scale tax hikes but later backtracked under pressure from the Prime Minister. This has left the door open for additional increases in 2025.What changes are being mentioned on the rumour mill?VAT on Private Education: No relief is expected before its introduction in January 2025Employer’s NICs: With rates increasing from 6 April 2025, there could be some relief, such as a higher Employment Allowance or a raised threshold before NICs become payableCharity Sector NIC Relief: There may be an attempt to mitigate the financial hit charities will take from the NIC riseInheritance Tax (IHT): Business owners and farmers are pushing (and protesting!) for an increase in the proposed £1m cap on Business Property and Agricultural Property ReliefCapital Gains Tax (CGT): The increased rate for those claiming Business Asset Disposal Relief could be revisitedChanges to Self-Assessment Threshold: HMRC has promised a change to the threshold at which self-employed taxpayers need to complete a tax return from £1,000 to £3,000. But there is no confirmed date its set to come in.The fact that both the Agricultural and Business Property Relief changes for IHT purposes are not coming into effect until April 2027 means that there is time and scope for these to be tweaked before they come into effect. It also means that the government can’t avoid the growing protests about these and there’s another two years of unrest about them if they aren’t planning to compromise on these rules are little more.Employer’s NI and the National Living WageThere are two major changes coming in April 2025, that we don’t expect to change and will put additional pressure on small and medium-sized businesses (SMEs):Increase in Employer’s National Insurance Contributions (NICs) – Businesses will face higher employment costs, potentially leading to job cuts, reduced hiring, or a shift towards automationSignificant rise in the National Living Wage – The planned increase will impact businesses that rely on young or low-skilled workers, leading to higher payroll costs and potential price increases for consumers.Both changes will likely contribute to rising inflation as businesses pass costs onto customers.Additionally, there’s concern that some firms may reduce their workforce or scale back expansion plans to manage these increasing expenses, further impacting economic growth.Fiscal Drag continuesOne certainty is that fiscal drag will bring in more tax revenue in April 2025. With tax thresholds remaining frozen, more people – including pensioners and those on the National Living Wage – will be dragged into higher tax bands.Impact on the EconomyThe Autumn Budget has already had a noticeable economic impact, particularly through the forthcoming employer NIC rise. Business confidence has taken a hit, and job vacancies are falling as firms look to cut costs ahead of April’s changes.With both the National Living Wage and employment rights expanding, employers face an increasing financial burden. Combine this with economic stagnation in the eurozone and the potential for new US trade tariffs, and it’s clear that businesses need stability now more than ever.Will the Bank of England step in?Many will be watching the Bank of England, hoping for an interest rate cut to stimulate growth. However, with inflation creeping back up – reaching 2.6% in November 2024 – the Bank may be reluctant to lower rates, particularly as the NIC increase is expected to further drive up prices. As it stands, interest rates are set to remain at 4.75% for now.What’s next?With just weeks to go before the Spring Statement, more details will emerge on potential tax changes. We will continue to monitor developments and keep you informed of any major tax policy shifts.On Friday 28th March (just 2 days after the Spring Statement), we are hosting an event, “It’s not what you’ve earned, it’s what you keep”. This event focuses on the impact the rising taxes has on building your wealth.We will dive into:Spring Statement announcements and impact, and upcoming changes from April 2025 and beyondNational Insurance and National Minimum wage increasesHow to protect your assets from Inheritance TaxChanges to Business Asset Disposal ReliefHow to maximise the value of your businessHow to make your business less dependent on youBook your free spot here.If you would like to discuss how these tax changes could impact you or your business, contact your Principal Adviser or email enquiries@a4g-llp.co.uk.Related Articles BlogInheritance Tax & BPR: Impact of the 2026 Reforms Find out more BlogHow inflation affects your money Find out more BlogShould I increase my prices due to tax and wage increases? Find out more BlogAdvantages of a Limited Liability Partnership (LLPs) Find out more BlogRising employment costs: Will you break even? Find out more BlogAutumn Budget 2024 – What Does It Mean For My Business? Find out more BlogAutumn Budget 2024 – The key changes Find out more ArticleThe most tax efficient way to manage excess cash in your business Find out more Contact me today!Josh CurtiesBA (Hons) FCACo Managing Partner01474 853856josh.curties@a4g-llp.co.uk Send me a message Ask me a questionFill in your details below and I’ll come back to as soon as I can! If your enquiry is more urgent, please do give me a call. Your full name*Contact no.*Email address* Business name*Industry / Profession*Your messageOne last thing...*By ticking this box you agree to being contacted via email or phone by one of our Advisers, and for the information you provide us with to be kept securely for future communications in line with the new GDPR Yes, I agree Other posts of interest 8th July 2021The final furlough – A rocky road to recovery Read more 11th September 2020The 1% improvements may have to wait Read more 14th March 2023Employment law: What to expect in 2023 Read more See more articles