Impact of Spring Statement 2025 on small businesses

Chancellor Rachel Reeves has announced her 2025 Spring Statement, here’s a summary of the key takeaways by Help to Grow: Management alumnus and Adaptive Accountancy Director Brad Walker, with a particular focus on the impact on small businesses and the UK economy.

The Chancellor acknowledged ongoing global uncertainty, including anticipated trade tensions and potential tariffs expected from the U.S. administration next week.

• The UK growth forecast has been revised downward:
  From 2% to 1% (Office for Budget Responsibility), whilst the Bank of England estimates 0.7%

• Investment in skills and infrastructure includes the opening of 10 new technical colleges focused on construction and trade-related training.

• Inflation sits at 2.8% in the 12 months to February 2025, gradually easing but still affecting consumer spending power.

• Welfare spending is being reduced, with over 1 million individuals expected to be impacted by cuts.

• Defence expenditure will rise by £2.2 billion, aligning with the UK’s international commitments.

• A 15% reduction in the civil service was announced—echoing trends seen in both U.S. politics and private sector restructuring.

While there were no headline-grabbing incentives for small businesses in this statement, one notable point is HMRC’s commitment to raising 20% more revenue from tax investigations.

This signals an increased focus on compliance and enforcement, particularly among SMEs, where bookkeeping errors or misclassified expenses can easily trigger an enquiry. Business owners should prepare for heightened scrutiny and ensure they have robust financial processes and support in place.

While the Spring Statement lacked sweeping reform, it delivered a mix of fiscal tightening and sector-specific investment.

From a small business perspective, the increasing pressure on compliance, alongside minimal direct support, means owners will need to be more proactive than ever in understanding their financial and tax obligations.

It's important to discuss how the changes outlined in the Spring Statement may impact your business with your accountant.

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This article was written by Brad Walker for the Small Business Charter. Brad is the founder and Director of Yorkshire-based accountancy firm, Adaptive Accountancy.