The Chancellor, Rachel Reeves, delivered her Spring Statement this afternoon.
With a background of continuing global uncertainty and a reduced growth forecast from the OBR, the Chancellor confirmed that there will be a full spending review in June and a Budget in the Autumn. She also confirmed that the Government’s fiscal rules are “non-negotiable”.
Whilst, as promised before today, the Statement did not include any tax changes, the Chancellor announced further measures to reduce tax avoidance by £1bn, by targeting promoters of tax avoidance schemes and prosecuting 20% more tax fraudsters each year.
The headline announcements include:
- The bringing forward of £3.25bn of investment in public services, through a new Transformation Fund.
- Defence spending is to increase to 2.5% of GDP from April 2027, and there will be a further £2.2bn of spending in 2025/26.
- Universal Credit Standard allowance to increase to £106 per week by 2029/30. The Universal Credit health element will be “cut by 50% and then frozen for new claimants”.
- An increase of £2bn to the UK Export Finance’s lending capacity.
- Further planning reforms and training for construction workers, with a promise of 1.5million homes by the end of this Parliament.
Despite there being little mention of tax today, a large number of tax and National Insurance changes take effect next month, including:
- The abolition of the non-UK domicile tax regime.
- An increase to Employer’s National Insurance of 1.2% (to 15%), and the Employer’s NI Secondary Threshold will decrease from £9,100 to £5,000. The Employment Allowance will increase from £5,000 to £10,500, and the current £100,000 threshold for eligibility will be removed.
- The introduction of a residence-based regime for Inheritance Tax.
Please contact your usual HaysMac tax advisor for assistance and advice.
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