Chancellor Rachel Reeves delivered her Spring Statement today, and while there were no big surprises, there are still some important changes heading your way from April that are worth knowing about.
We’ve pulled together the key points so you don’t have to wade through the jargon yourself.
The Big Picture
The Chancellor kept things fairly low-key, focusing on “security, stability and growth” against a backdrop of global uncertainty. The Office for Budget Responsibility (OBR) has trimmed its growth forecast for 2026 down to 1.1%, but the outlook improves after that, with growth predicted at 1.6% for 2027 and 2028.
Inflation is expected to come back down to the government’s 2% target by late 2026 (it’s currently sitting at around 3%), and unemployment is forecast to peak at 5.3% this year before gradually falling. Worth noting though — these forecasts don’t yet factor in the potential impact of rising oil prices and international tensions, so things could shift.
Making Tax Digital for Income Tax — It’s Happening!
If you were holding out hope for a last-minute delay to Making Tax Digital (MTD) for Income Tax, we’re afraid the Spring Statement was the final chance and no changes were announced.
MTD for Income Tax goes ahead as planned from 6th April 2025.
This will affect most sole traders and landlords in how they report their income and expenses. If you’re unsure whether this applies to you, please get in touch with us and we’ll help you get sorted.
Personal Tax Thresholds — Still Frozen
Income Tax and National Insurance rates on earned income aren’t changing. However, the freeze on Income Tax and NI thresholds continues until 2030–31.
What does that actually mean for you? Well, as your earnings rise with inflation but the thresholds stay the same, you could end up paying a higher rate of tax even though you haven’t had a real increase in spending power. This is sometimes called “fiscal drag” — and it’s worth keeping an eye on.
If you’re based in Scotland, remember that Scottish Income Tax bands are set separately, and there are changes to thresholds coming in from April too.
Class 2 National Insurance Changes
From 6th April, the Small Profits Threshold (the profit level below which sole traders can choose to pay Class 2 NI voluntarily) rises to £7,105.
The Class 2 NI rate itself will be £3.65 per week.
Dividend Tax Rates Are Going Up
If you receive dividend income, heads up — there’s a 2% increase coming in from April on the basic and higher rates of dividend tax. Here’s what the new rates look like:
| Band | Old Rate | New Rate (from April) |
| Basic Rate | 8.75% | 10.75% |
| Higher Rate | 33.75% | 35.75% |
| Additional Rate | 39.35% | 39.35% (unchanged) |
Other April Changes to Keep in Mind
Alongside the tax changes, there are a few other things coming into effect from April that could affect your business:
- Minimum wage increases — if you employ staff, make sure you’re up to date with the new rates.
- Business rates changes — relief schemes are being adjusted, so it’s worth checking how this affects your premises costs.
We’re Here to Help
As always, if any of this raises questions or you’re not sure how these changes affect your business specifically, please don’t hesitate to get in touch.
We’ll keep you posted as things develop, and if anything else comes out of the woodwork, you’ll hear about it from us first.
The MalgraBooks Team
