After the usual flurry of “leaks” and speculation, Chancellor Rachel Reeves delivered a Spring Statement today that was effectively a bit of a non-event. This was to be expected with the Government having moved to a “one major budget per year” cycle. This means the Spring Statement has returned to its original purpose: a technical update on the economy rather than a stage for new “tax rabbits being pulled out of hats”.
As always, we’ve stripped out the politics to focus only on what actually affects our clients, though have included some OBR figures.
Headline changes
- No new tax changes: The Chancellor confirmed there are no new tax rises or cuts in this statement. Those previously announced in the Autumn Budget (which we covered here) will therefore continue as previously announced.
- Economic “Stability”: The OBR has slightly downgraded growth forecasts for 2026 to 1.1% (previously 1.4%), but inflation is still on track to hit the 2% target by next year.
- Fiscal Headroom: Higher than expected tax receipts in January gave the Treasury an extra £23.6bn of breathing room, though they aren’t spending it yet.
Reminders for April 2026
While today was quiet, don’t forget that several big changes from the last Autumn Budget kick in this April. If you haven’t already planned for these, now is the time:
- Dividend Tax Rise: Rates are increasing by 2% (to 10.75% for basic rate and 35.75% for higher rate), though remain at 39.35% for additional rate taxpayers. For those of you trading through limited companies, we are in the process of reviewing your expected income for the year and will be emailing recommendations in the next few weeks.
- IHT Reforms: The new restrictions on Agricultural and Business Property Relief (APR/BPR) come into effect on April 6th.
- The “Stealth Tax”: Personal tax thresholds remain frozen until 2031, meaning as your earnings go up, more of your income is dragged into higher tax brackets.
How does this feel for the rest of us?
For most people, a “boring” statement is usually a good thing, it means no unexpected hits to our pockets. However, with “fiscal drag” still quietly increasing the tax burden and growth forecasts looking a bit sluggish, it might feel like the Government is more focused on balancing the national books than helping with the household ones. It’s a “steady as she goes” approach, even if the waters still feel a little choppy.
Final note
Because the Government is moving to a single annual Budget, we may refrain from providing these summaries for future Spring Statements unless there is a significant policy shift. We will of course continue providing our analysis following the more significant Autumn Budgets.
