The Chancellor today presented her first Spring Statement, together with a report by the Office of Budget Responsibilities. As noted previously, the Chancellor confirmed that there will be only one fiscal event in the year, and as such, there were no further income tax and National Insurance increases today beyond those already announced in the previous Autumn 2024 budget statement.
Further cuts were announced to her spending plans, in particular in respect of reforms to the welfare system and efficiencies in the public sector in a bid to ensure the government stays on track to meet its budgetary targets, especially for future commitments to meet our defence spending.
As expected, the Office for Budget Responsibility announced that it has halved its 2025 growth forecast from 2% to 1%.
Employers National Insurance
Potentially one of the key effects on business growth in the new fiscal year is the increase in Employer’s National Insurance from 13.8% to 15% and the stinging reduction in the Employer’s National Insurance threshold from £9,100 to £5,000. To mitigate this impact on for small companies, the government has announced an increase in the Employer’s allowance from £5,000 to £10,500 per annum.
However, umbrella employees will feel the impact of these changes, unless they can renegotiate their contract to accommodate for the increases.
Tackling Umbrella Company Non-Compliance
For umbrella contractors, the government continues to address non-compliance in the umbrella company market ensuring regulations are in place given the promotion of aggressive tax avoidance schemes within the umbrella market. There are also further changes arising from the outcomes of recent consultation which are likely to be legislated in April 2026- we will keep you informed of these changes, once clarified.
Brookson Help & Support
More than ever, Brookson can assist with ensuring that you maximise income and reliefs to full effect as a result of previously announced budgetary changes. To read announced changes from the Autumn Budget – Click here from An outline of the key changes arising from the budget in respect of direct/indirect taxes is detailed below, together with planning tips for you to consider.
