Spring Statement 2026: what it means for you

Chancellor Rachel Reeves delivered her Spring Statement to the House of Commons yesterday (3rd March 2026) – and in keeping with the government’s promise to reserve major announcements for the Autumn Budget, it was a deliberately low-key affair. There were no new taxes and no dramatic policy shifts. But with the new tax year now less than five weeks away, there’s still plenty that demands your attention.

Here’s what you need to know.

What is the Spring Statement?

The Spring Statement isn’t a full Budget. Under the current government’s approach, the Autumn Budget is the main fiscal event of the year – it’s when the Chancellor sets out major tax and spending plans. Yesterday’s statement was primarily an opportunity for the Office for Budget Responsibility (OBR) to update its economic forecasts, and for the Chancellor to respond to them.

That said, the picture presented yesterday will shape future decisions. And with April fast approaching, significant changes from last November’s Autumn Budget are coming up too. We’ll take a look at those a little later on in this post.

The economic picture at a glance

The Spring Statement’s headline story is slower near-term growth. This is partly attributed to global uncertainty, including the ongoing conflict in the Middle East and its impact on energy markets. The Chancellor also highlighted some brighter news: inflation falling faster than expected, reduced borrowing, and Bank of England rate cuts that are forecast to save families over £1,300 a year on a typical new fixed-rate mortgage.

There was less good news about employment. The OBR now expects the unemployment rate to peak at 5.3% this year – worse than the November forecast of 4.9%. This is being driven by weak hiring demand and more (particularly younger) people entering the labour market without finding work.

No new taxes – but major changes from April 2026

While yesterday brought no new announcements, a number of significant measures from the 2025 Autumn Budget take effect from April 2026. Below is a quick summary.

For business owners and directors

Capital allowances. The main rate of writing down allowances (WDAs) for plant and machinery goes down from 18% to 14% from 1st April (for companies) and 6th April (for unincorporated businesses). Writing down allowances work on a reducing balance basis. This means that, each year, you claim a percentage of the remaining pool value, rather than writing off the full cost at once. Bringing down the rate from 18% to 14% means a smaller portion of that balance is relieved each year, so it takes you longer to recover the full cost of an asset. However, a new 40% first-year allowance – introduced from January 2026 for certain assets (including most plant and machinery) – does offer faster upfront relief for businesses that previously couldn’t access full expensing. If you have significant capital expenditure planned, speak to us about the options.

Dividend tax. Dividend tax rates rise from 6th April. The basic rate moves from 8.75% to 10.75%, and the higher rate from 33.75% to 35.75%. If you draw income as dividends – as many owner-managed business directors do – you’ll pay more from next month. The £500 dividend allowance remains unchanged.

National Living Wage. The National Living Wage rises from £12.21 to £12.71 per hour from 1st April (a 4.1% increase). The National Minimum Wage for 18–20 year olds rises to £10.85, and for under-18s and apprentices to £8.00 per hour. Payroll systems need to reflect these new rates from 1st April.

Corporation Tax late filing penalties. The initial penalty for late Corporation Tax returns doubles from £100 to £200 from 1st April, with further increases for repeated delays.

For sole traders and landlords

Making Tax Digital. (Urgent action required). MTD for Income Tax launches on 6th April, and this is one of the biggest changes to the tax system in a generation. In its first phase, it applies to sole traders and landlords whose combined gross income from self-employment and/or property exceeded £50,000 on their 2024/25 tax return.

If you’re in scope, you’ll need to keep digital records and send quarterly updates to HMRC using MTD-compatible software. You’ll still need to submit your tax return by 31 January. The first quarterly update, covering 6th April to 5th July, is due by 7th August. The threshold then drops to £30,000 in April 2027 and £20,000 in April 2028.

With only weeks to go, if you haven’t yet sorted your software, contact us as soon as possible. Don’t leave it to the last minute.

For individuals and families

Fiscal drag. Income Tax thresholds remain frozen until 2031. As wages rise, more people are being pulled into higher tax bands without any formal rate increase. The OBR itself noted yesterday that it expects living standards to be squeezed as a result.

Agricultural and business property relief. From 6th April, the 100% IHT relief on qualifying business and agricultural assets is capped at £1 million per person. Assets above that threshold attract 50% relief – an effective IHT rate of 20%. If you own agricultural land or a qualifying business and haven’t reviewed your estate planning, speak to us now.

Pensions and IHT. Pension pots are being brought within the scope of Inheritance Tax from April 2027. The OBR yesterday confirmed this is expected to account for around 14% of total IHT receipts by 2030/31. The coming months are a valuable window to review your pension and estate planning before the change arrives.

Your April 2026 Action Checklist

What should you do next?

Yesterday’s Spring Statement was about stability and reassurance. But the economic forecasts confirm a challenging environment – slower near-term growth, rising unemployment and ongoing cost pressures for businesses and households alike.

The new tax year is now just weeks away, and the changes it brings are significant. If you’d like to discuss what any of this means for you, please get in touch with our team. We’re here to help.