Reeves sets Spring Statement 2025 for March 26th

Rachel Reeves has diarised Spring Statement 2025 for March 26th.

The Treasury revealed on Monday that the chancellor’s “Spring Forecast” would be unveiled on the last Wednesday of the first quarter of next year.

Reeves will unveil what will be her second fiscal statement almost on the eve of much-disliked changes to employer’s National Insurance Contributions.

Under her Autumn Budget, employer NICs is set to rise to 15%, and the threshold at which it falls due is set to drop to £5,000, from April 6th 2025,

‘Spring Forecast gives Reeves a chance to adjust contentious tax changes’

But according to most IT contractors’ advisers yesterday, the chancellor looks poised to use the statement to scrap, shelve or soften the £25billion National Insurance raid.

Susan Ball, employment tax partner at RSM UK told ContractorUK: “While the Spring Statement may not be as extensive as…[Autumn Statement 2024], it does offer the chancellor a chance to…possibly adjust some of the more contentious Autumn Budget tax measures.

“For example, the employers’ NIC changes scheduled for April 6th 2025.

“After significant backlash from businesses and the charity sector, changes [to the NI changes] would be welcome. Although that would undoubtedly mean [tax] increases elsewhere.”

‘Steady the ship’

Christian Hickmott, managing director of Integro Accounting, believes any U-turn on National Insurance Contributions 13 weeks from now will be blamed on the economy.

He told ContractorUK: “The March 26th 2025 date provides the government with a platform to potentially ‘steady the ship,’ leaving open the option to repeal some of the more damaging aspects of Autumn’s budget, like the employer NICs hike.

“All the while, a fast-changing and very unpredictable geo-political climate is shaping up to be the perfect scapegoat for any U-turns -- were they to take place.”

‘One major fiscal event a year’

Jon-Marc Spatcher of The Affinity Group (which owns SG Accounting and SG Umbrella), observes that the Treasury is already managing expectations.

When it announced the March 26th delivery date, HMT officials said the chancellor remained committed to only “one major fiscal event a year”.

The purpose of the Spring Forecast being more minor than the Autumn Budget is to “give families and businesses stability and certainty on upcoming tax and spending changes”.

Treasury officials added that such an approach supports “the government’s growth mission.”

‘Spring Forecast still expected to bring some tax changes’

Despite the caveat, Mr Spatcher, The Affinity Group’s group managing director, similarly envisions Reeves tackling the prospect of higher NICs bills from April 6th.

“[Spring Forecast 2025] is still expected to bring some tax changes, particularly for the UK contractor and umbrella sectors.

“After the significant £40bn tax rises in the Autumn Budget, this event may be smaller in scale, but it could still address some of the more controversial measures, such as National Insurance Contributions,” he says.

‘Budgets rarely stick to the script, despite heavy punches on contractors’

IR35 specialist Charlie Hemsworth also picked up on the Treasury playing down what the chancellor will announce.

“The government’s pledge of ‘one set of tax changes a year’ sounds hopeful, but let’s face it -- budgets rarely stick to the script,” Hemsworth, a director at Bauer & Cottrell (B&C) told ContractorUK.

“So we might therefore see a few more tax tweaks on March 26th, especially with the Treasury looking for every penny to plug the gaps.

“That said, 2025’s Spring Forecast is unlikely to deliver anything more shocking than the Autumn Budget, which already landed some heavy punches [on contractors].”

‘Spring Statement 2025 could signal start of umbrella company market reforms’

Assuming it goes ahead oN 26.03.25, the spring statement will take place about 12 months prior to umbrella company regulation, set to be introduced from April 6th 2026.

Given that the legislative detail is still unknown (on how agencies will be made primarily PAYE-responsible for umbrellas), Reeves could unleash it at the forecast.

Speaking from the offices of SG Umbrella yesterday, Spatcher fleshed out his assessment:  

“More importantly [for contractors], Spring Statement 2025 could signal the start of much-needed reforms to the umbrella company sector,” he told ContractorUK.

“It’s a sector that’s been under increasing scrutiny. But the chancellor’s forecast could also offer opportunities for relief in areas like employment allowances or NIC adjustments, which are closely tied to contractors and umbrella companies’ operations.

“Our hope is that Reeves will provide clarity and stability for businesses and workers in the sector.”

‘Some surprises from Reeves may still be in store’

Hemsworth, of B&C, echoed: “For contractors and their engagers, attention [next year] will be firmly on the following year’s umbrella company reforms.

“With plans for draft legislation to be included in the Finance Bill 2025-26, the government has committed to engaging with stakeholders to refine the details.

“If March’s Spring Statement finally signals the start of this process, it will be a welcome step forward in tackling non-compliance.

“While some surprises may still be in store, the statement could mark the beginning of these crucial reforms. Let’s hope so.”

‘HMRC’s Tackling Umbrella Non-Compliance document to be key focus in 2025’

RSM’s Ms Ball suggests Spring Forecast is likely to formalise the outcome of ‘Tackling Non-Compliance in the Umbrella Company Market.’

“[It will be a] key focus for business when thinking about their labour supplier models [in 2025],” she said of the HMRC policy document.

“The government suggested at Autumn Budget that the responsibility for PAYE accounting would shift to the recruitment company, or the end-client if no recruitment company is involved, [but only] starting from April 2026 [so as] to give businesses ample time to implement the new rules and conduct supplier due diligence.

“In theory, this approach is one of the most effective ways to combat tax avoidance and fraud within the industry.”

‘Recession fears’

Spring Forecast 2024 combatting tax avoidance might be crucial for the Treasury coffers as by March 2025, the UK “could be heading for a recession.”

“Or we may find that the country has avoided recession,” continued Integro’s Mr Hickmott.

“While I can’t help but wonder what more Reeves has up her sleeve for March 26th…I suspect even the chancellor herself will be playing a game of watchful waiting at this point. And will decide upon the details when we pull out of winter.

“That said, further tax rises, even if they are dressed up theatrically as something else, are unlikely to be high on her agenda -- even for a government that seems to value stubbornness and a thick skin ahead of reason.”