Spring Statement 2026 Summary

The 2026 Spring Statement’s now been delivered by Chancellor of the Exchequer, Rachel Reeves, providing an updated snapshot of the UK’s economic outlook for the year ahead.

As expected, the Chancellor reserved major fiscal announcements for the Autumn Budget in an effort to provide greater stability and reduce speculation around tax and spending decisions. As a result, this Spring Statement introduced no significant new policy changes.

However, it did reaffirm the Government’s broader economic direction and provide context for businesses planning ahead.

The TC Group team has summarised the key takeaways, highlighting what SMEs and Owner-Managed Businesses should be aware of as we move through 2026.

 

ECONOMIC OUTLOOK

The OBR’s real GDP growth forecast’s expected to slow to 1.1% in 2026.

This is said to reflect the weaker-than-expected GDP outturns in late 2025, further evidence of a loosening labour market, and subdued business surveys.

Faster growth is anticipated for following years, with a predicted rise of 1.6% in 2027 and 2028, and 1.5% in 2029 and 2030 as productivity growth rises and the negative output gap closes.

The Chancellor said, after accounting for inflation, “people are forecast to be over £1,000 a year better off” by the next election.

 

EMPLOYMENT

The OBR’s report noted that the labour market’s softened, with redundancy rates rising. It forecasts unemployment will increase to 5.3% in 2026, up from 4.75% in 2025.

The OBR also revised its November forecast, projecting unemployment at 4.1% by 2030, while acknowledging the inherent uncertainty in longer-term economic forecasting.

The Chancellor also highlighted planned reforms to apprenticeships aimed at supporting young people going into work, with further changes expected to be announced in the coming weeks.

 

TAX INCREASES ANNOUNCED IN THE AUTUMN BUDGET REMAIN UNCHANGED

No further tax increases were announced in the Spring Statement. However, since the previous Autumn Budget, several amendments have been made to previously announced measures.

Here’s a reminder of the key changes coming into effect in April 2026:

 

AGRICULTURAL AND BUSINESS PROPERTY RELIEF

Originally proposed to be reduced to £1 million, on 23 December, it was announced the maximum 100% relief rate will instead be available for the first £2.5m.

Spouses or civil partners will be able to pass on up to £5m in qualifying agricultural or business assets between them before paying inheritance tax.

AGRICULTURAL RELIEF CHANGES

 

TAX RATE CHANGES TO DIVIDENDS

From April 2026, the basic rate and higher rate of tax on dividends will increase by two percentage points.

• Basic rate taxpayer: 10.75%
• Higher rate taxpayer: 35.75%

The additional rate will remain unchanged.

CHANGES TO INCOME TAX RATES

 

INCREASES TO MINIMUM WAGE

The national living wage for workers aged 21 and over will increase by 4.1%, rising to £12.71 per hour. This is equivalent to approximately £900 more per year for a full-time employee.

Minimum wage for those aged 18 to 20 will rise to £10.85 per hour, meaning approximately £1,500 extra per year for someone working full-time.

For 16 and 17-year-olds, as well as apprentices, the minimum wage will increase to £8.00 per hour.

Preparing for wage increases

 

CAPITAL ALLOWANCES

The main Writing Down Allowance (WDA) will be reduced from 18% to 14% for main rate plant & machinery from April 2026. A hybrid WDA rate will apply where a period straddles April 2026.

The start of the year saw a new 40% First‑Year Allowance being introduced, applying to new, unused main‑rate plant & machinery, including assets used for leasing.

Other allowance extensions will be continued until 2027 for zero-emission assets.

Changes to Capital Allowances

 

CAPITAL GAINS TAX

The previously announced changes to Business Asset Disposal Relief (BADR) remain firmly in place. From 6 April 2026, the Capital Gains Tax rate applying to gains qualifying for BADR will increase from 14% to 18%.

The core features of BADR remain unchanged. The relief will continue to apply to qualifying business disposals, and the lifetime limit remains capped at £1 million.

Nevertheless, disposals completed on or after 6 April 2026 will be subject to the higher rate, with HMRC’s anti-forestalling rules continuing to apply to prevent transactions being accelerated purely to secure a lower tax rate.

 

Business Rates in England

The current retail, hospitality and leisure relief will be replaced by two lower business rates multipliers for properties with rateable values below £500,000.

Pubs and music venues in England will be given a 15% discount on their business rates bills from April 2026. They will also not see increases in their bills for 2 years.

Business Rates changes

 

LATE CORPORATE TAX RETURN PENALTIES TO DOUBLE

Late filings on or after 1 April 2026 will face increased filing penalties, rising from £100 to £200 for a late Corporate Tax Return.

If the Return is more than three months late, the penalty will be £400.

 

READY TO SUPPORT YOU

The economic environment remains volatile. Owner-Managed Businesses are navigating high business rates, employment law reforms, National Minimum Wage increases and changes to capital allowances – all while trying to plan for growth with confidence.

With the new tax year fast approaching, there is still time to take proactive action.

We work closely with SMEs and Owner-Managed Businesses every day. We understand the pressures you’re facing because we see them first-hand, and we know where the opportunities lie.

Now is the time to review your tax position, sense-check your plans and ensure you’re structured as efficiently as possible.

For clear, practical advice tailored to your business, speak to our team today.