What You Need to Know About Chancellor Reeves’ Latest Announcements
Last updated: April 11, 2025
The Spring Statement delivered by Chancellor Rachel Reeves on March 26, 2025, confirms several significant tax and financial changes introduced in the Autumn Budget that will directly impact small businesses and self-employed individuals. As your financial advisors, we have analysed these changes previously announced in the Autumn Budget to help you understand what they mean for your business and finances.
Key Tax and National Insurance Changes at a Glance – as mostly announced in the Autumn Budget
1. Employer’s National Insurance Contributions (NICs) 📈
What’s changing:
- The employer NIC rate will increase from 13.8% to 15% from April 6, 2025
- The earnings threshold will decrease from £9,100 to £5,000
What this means for you: Employers will pay higher NICs on a larger portion of employee earnings. For a single employee earning £30,000 annually, this represents an additional cost of £865.80 per year. For businesses with multiple employees, this increase will significantly impact your bottom line.
Calculation breakdown:
- Current system (until April 5, 2025):
- Taxable earnings: £30,000 – £9,100 = £20,900
- NICs at 13.8% = £2,884.20
- New system (from April 6, 2025):
- Taxable earnings: £30,000 – £5,000 = £25,000
- NICs at 15% = £3,750
- Increase: £865.80 per employee
Our advice: Review your staffing budget immediately and forecast the impact this will have on your business over the next financial year. Consider whether you can offset these costs elsewhere or if you need to adjust your pricing strategy.
2. Employment Allowance Increase 🎯
What’s changing:
- Employment Allowance will increase from £5,000 to £10,500
- The previous upper eligibility threshold of £100,000 will be removed
What this means for you: This is positive news for eligible employers, who can now reduce their annual NIC liability by up to £10,500. With the removal of the £100,000 threshold, more businesses will qualify for this relief.
Important note: Single-director companies without employees remain ineligible.
Example impact: If your total employer NICs amount to £12,000:
- With the new £10,500 Employment Allowance: You’ll only pay £1,500
Our advice: Ensure you’re claiming Employment Allowance if eligible. This could significantly offset the increased NIC costs outlined above.
3. Business Asset Disposal Relief (BADR) Changes 📊
What’s changing:
- BADR Capital Gains Tax rate will increase from 10% to 14% from April 6, 2025
- A further increase to 18% is planned for April 6, 2026
What this means for you: Business owners looking to sell or dispose of qualifying assets will face significantly higher tax liabilities. On a qualifying gain of £100,000, the tax payable will increase from £10,000 to £14,000 (after April 2025) and to £18,000 (after April 2026).
Our advice: If you’re planning to sell your business or dispose of significant assets in the near future, consider accelerating these plans to complete before April 2025 to benefit from the current lower rate.
4. Capital Gains Tax (CGT) Rate Increases 💰
What’s changing: For disposals made on or after October 30, 2024, CGT rates for most assets (excluding residential property) will increase:
- Basic rate taxpayers: From 10% to 18%
- Higher rate taxpayers: From 20% to 24%
What this means for you: This represents a substantial increase in capital gains tax liability. On a gain of £50,000, a basic rate taxpayer would now pay £9,000 instead of £5,000 – an increase of £4,000.
Our advice: Review your investment portfolio and potential disposals with urgency. If you’re considering selling assets, you may want to complete transactions sooner rather than later.
5. Making Tax Digital (MTD) for Income Tax 💻
What’s changing:
- From April 2026: Mandatory for sole traders and landlords with qualifying income over £50,000
What this means for you: If you fall into this category, you’ll need to prepare for quarterly digital tax reporting. This will require MTD-compatible software and potentially new bookkeeping processes.
Our advice: Don’t wait until 2026. Start reviewing your current accounting systems now and consider adopting MTD-compliant software early to avoid disruption when the requirements take effect.
What Business Organisations Are Saying
The business community has expressed mixed reactions to the Spring Statement:
- Federation of Small Businesses (FSB) has expressed concern over the economic outlook, emphasising the need for immediate action to stimulate growth.
- Institute of Directors (IoD) viewed the Chancellor’s approach as a balanced response to fiscal challenges, noting that while the strategy relies more on increasing tax receipts than spending cuts, there are positive aspects such as planning reforms.
Your Spring Statement 2025 Action Plan
Immediate Actions (April-May 2025)
- Recalculate your employer NIC costs using the new rates and thresholds
- Check your Employment Allowance eligibility and ensure you’re claiming the full amount
- Review any planned business or asset disposals in light of the CGT and BADR changes
- Schedule a tax planning session with us to explore specific strategies for your business
Medium-Term Planning (June-December 2025)
- Reforecast your 2025/26 business budget to account for increased employment costs
- Evaluate your business structure to ensure it remains tax-efficient given the changes
- Begin preparations for Making Tax Digital if you’ll be affected by the 2026 implementation
- Consider reviewing your pricing strategy to maintain margins in light of increased costs
Payroll & Employer NICs Checklist
- Recalculate Employer NICs with the new 15% rate and £5,000 threshold
- Adjust staff budgets to reflect increased NIC costs
- Check Employment Allowance eligibility
- Apply for the increased £10,500 Employment Allowance if eligible
Capital Gains & Business Disposal Checklist
- Review business disposal plans (consider completing before April 2025)
- Check CGT exposure on potential asset sales
- Explore tax-efficient investment alternatives where appropriate
Digital Tax Compliance Checklist
- Prepare for Making Tax Digital for Income Tax (MTD ITSA)
- Check if your current software is MTD compatible
- Consider training needs for you or your team on new systems
How We Can Help
At AcuAccounts, we specialise in helping self-employed individuals and small businesses navigate tax changes efficiently. We can:
- Provide a personalised assessment of how these changes will impact your specific business
- Create tax-efficient strategies tailored to your circumstances
- Help you implement and transition to MTD-compliant systems
- Ensure you’re claiming all available allowances and reliefs
Don’t navigate these complex changes alone. Book a consultation with our specialists today to ensure your business is prepared for the changes ahead. Get in touch at info@acuaccounts.com and book a consultation with our team. You can also call us directly on 0203 907 9027.
Visit our contact page at AcuAccounts Contact for more information.
This article provides general information based on the Spring Statement 2025 and should not be considered as specific tax advice. Tax regulations can change, and individual circumstances vary. Always consult with your qualified accountant before making financial decisions.
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