Key Takeaways from the Spring Budget 2025

Chancellor Rachel Reeves has unveiled the Spring Budget 2025, introducing several measures that will impact individuals and businesses alike. Here’s a concise overview:

1️⃣ Economic Growth Forecasts

The Office for Budget Responsibility (OBR) has reduced the UK’s economic growth forecast for 2025 from 2% to 1%. However, growth projections for subsequent years have been slightly upgraded, with GDP expected to grow by 1.9% in 2026 and 1.8% in 2027.

2️⃣ Welfare Reforms

Significant changes to welfare have been announced, including a freeze on key Universal Credit payments until 2030 and a reduction in the health element for new claimants. These reforms aim to encourage employment and are projected to save £3.4 billion.

3️⃣ National Living Wage Increase

In a move to support low-income workers, the National Living Wage will increase by 6.7%, resulting in an annual pay rise of approximately £1,400 for three million workers starting April 1.

4️⃣ Business Rates Relief Adjustment

The previously announced reduction in Business Rates Relief from 75% to 40% will proceed as planned from April 1, affecting sectors like retail, hospitality, and leisure.

5️⃣ Defence Spending Boost

An additional £2.2 billion has been allocated to defence, aiming to enhance the UK’s security and global presence.

6️⃣ Crackdown on Tax Avoidance

The government plans to increase tax fraud prosecutions by 20%, with an estimated additional revenue of £7.5 billion.

7️⃣ Transformation Fund

A £3.25 billion Transformation Fund has been established to drive efficiencies across government departments, aiming to save money later in the parliamentary term.

At Fosse Bookkeeping & Accountancy, we understand that these changes may raise questions about how they affect your personal or business finances. Our team is here to provide clarity and guidance tailored to your specific circumstances.

Feel free to reach out to us for personalised advice and support.

🧡Email billie@fosseaccounting.com

📞07464 491 396