Here are our key highlights
No new tax increases or relief for businesses and taxpayers
As promised, the Chancellor refrained from announcing further tax increases. There was no backtracking on measures already set out in the Autumn Budget, such as the anticipated business rates hikes and increased employer National Insurance Contributions. These upcoming changes are expected to place a substantial burden on many businesses.
Revised economic outlook
While this year’s growth forecast was reduced from 2% to 1%, there was a more optimistic long-term outlook. The Office for Budget Responsibility (OBR) upgraded growth projections for the coming years, with GDP growth anticipated to gradually rise to 1.8% by 2029.
Making Tax Digital (MTD) to extend to landlords and sole traders
An important but understated announcement was the phased rollout of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA). Starting in April 2026, the scheme will apply to sole traders and landlords earning over £50,000. The threshold will reduce to £30,000 in 2027 and £20,000 by 2028, bringing an estimated 900,000 sole traders into the MTD regime by 2028. Additionally, HMRC plans to tighten enforcement, with new penalties for late VAT and Self-Assessment payments. Taxpayers who fail to pay within 15 days will incur a 3% charge, with an additional 3% after 30 days. Late payment interest rates will more than double, from 4% to 10%. Small businesses and individuals will need to ensure they are prepared for these reporting changes.
Crackdown on tax evasion
The Chancellor revealed plans to ramp up efforts to combat tax evasion, with an increased focus on prosecuting tax fraud, aiming for a 20% rise in prosecutions. The government will continue investing in advanced technology and expanding HMRC’s capacity to combat tax avoidance.
Capital spending and infrastructure projects
The government will increase capital spending by £13 billion over the course of the Parliament, focused on growth-enhancing investments, including infrastructure, housing, and defence innovation. This adds to the £100 billion increase in capital spending announced in the Autumn Budget.
Commitment to housing and construction
More than £600 million will be allocated over the next four years to train up to 60,000 new skilled construction workers, including bricklayers, electricians, and carpenters. The OBR estimates that housebuilding will contribute 0.2% to GDP by 2030, potentially generating £6.8 billion, rising to £15.1 billion by 2035. The government remains on track to deliver 1.3 million new homes by the end of the current Parliament, a target supported by planning reforms via the Planning and Infrastructure Bill.
Welfare cuts
The government plans to cut £6.4 billion from the health and disability benefits budget by 2029/30. However, this will be partially offset by an increase in the standard rate of Universal Credit (UC), reducing the net savings to £4.8 billion. Eligibility for the Personal Independence Payment (PIP) will also be tightened, meaning fewer claimants will qualify. While current claimants won’t be immediately affected, those who need to reapply or undergo reassessment under the new rules will face stricter eligibility criteria.
While the Spring Statement didn’t bring new tax changes, its implications for business, welfare, and the broader economy are significant. Taxpayers, particularly small businesses and sole traders, should begin preparing for the upcoming shifts in tax reporting and enforcement.
Additionally, the government’s focus on infrastructure and housing, along with the continued push for capital investment, may present good opportunities for those in the construction sector.
Oscar heads our tax department and provides advice on tax structuring, planning and compliance services to entrepreneurs and their businesses.
