The Chancellor's Spring Statement - March 2025

UK Spring Budget - A brief summary

In line with Labour’s desire for only one major fiscal event per year, there were no new tax announcements. There were also no U-turns on the changes announced for April, which included:

Employer’s National Insurance –

Employers will increase the rate of National Insurance paid on employee wages by 1.2% to 15% from 6 April 2025.

They will lower the threshold for required contributions to £5,000 from £9,100.

To reduce the impact of this change on the smallest businesses, the government will increase the employment allowance to £10,500.

Businesses that pay over £100,000 in employer National Insurance cannot claim the employment allowance right now. But, this limit will be lifted.

Business Asset Disposal Relief –

The lifetime limit applicable to gains on the sale of qualifying businesses will remain at £1 million. However, the rate of tax will increase from 10% to 14% in April 2025 (and increase to 18% from April 2026).

The government will end non-domiciled tax status and switch to a residency-based system from April 2025. This means that foreign nationals living in the UK will pay UK tax on their overseas income and gains.

National Living Wage and National Minimum Wage –

The National Living Wage (for those aged 21 and over) will increase by 6.7% to £12.21.

The National Minimum Wage will increase by 16.3% to £10.00 per hour for those aged 18 to 20, and to £7.55 for those ages 16 and 17.

Want to talk about how this affects your business? Get in touch