Spring Statement 2025: Our Summary for SMEs
Key Announcements, Tax Changes, and Economic Measures Affecting UK Small Businesses
The Spring Statement 2025 introduced significant support measures for UK SMEs, with a particular focus on digital transformation, green initiatives, and easing the administrative burden. The Chancellor announced £850 million in business rate relief and extended the Recovery Loan Scheme to support small business growth.
Key Takeaways for Small Businesses
The Spring Statement 2025 contained several important announcements specifically targeting small and medium-sized enterprises. Here are the most significant changes that could affect your business.
- Extended business rates relief for retail, hospitality, and leisure sectors
- Increased Employment Allowance made permanent
- Digital transformation tax incentives expanded
- Green energy investment support for SMEs
- Simplified customs procedures for EU trade
Tax Changes and Allowances
| Measure | Previous | Spring Statement 2025 |
|---|---|---|
| Employment Allowance | £4,000 (temporary increase) | £5,000 (permanent) |
| Annual Investment Allowance | £1 million (temporary) | Permanent at £1 million |
| R&D Tax Credits (SME scheme) | 130% enhanced deduction | 145% for digital R&D projects |
| VAT Registration Threshold | £85,000 | Frozen until April 2026 |
| Corporation Tax | 19% (main rate) | Remains 19% for profits under £50,000 |
A small business with 4 employees each earning £25,000 would save approximately £1,500 in NICs annually thanks to the increased Employment Allowance. This represents a permanent reduction in the cost of employment for eligible businesses.
Business Rates and Property Measures
The Chancellor announced several property-related measures aimed at supporting high streets and reducing costs for SMEs:
- 75% business rates discount for retail, hospitality and leisure sectors extended until March 2026
- £1.7 billion allocated to support businesses affected by revaluations
- Transitional relief scheme extended to limit bill increases
- Improvement relief introduced – no rate increases for property improvements for 12 months
Digital Transformation Support
1 Enhanced R&D Tax Credits
The SME scheme enhancement rate increases to 145% for qualifying digital transformation expenditures, including cloud computing, AI integration, and e-commerce development.
2 Making Tax Digital Support Package
£100 million allocated to help small businesses adopt MTD-compliant software, with grants of up to £1,000 available for digital accounting system implementation.
3 Digital Skills Tax Credit
New tax credit covering 50% of digital skills training costs for employees, up to £2,000 per employee annually, for businesses with fewer than 50 employees.
Energy and Sustainability Measures
| Initiative | Details | Eligibility |
|---|---|---|
| Green Technology Investment Deduction | 130% first-year allowance for energy-efficient equipment | All businesses |
| EV Charging Infrastructure Grant | Up to 75% of costs, maximum £15,000 per site | SMEs with fewer than 250 employees |
| Energy Efficiency Loan Scheme | 0% interest loans for green improvements | Businesses with turnover under £45m |
| Carbon Reduction Tax Credit | £10 per tonne of CO2 reduced beyond targets | Manufacturing and transport SMEs |
Brexit Support and International Trade
Several measures were announced to ease post-Brexit trading difficulties for SMEs:
- Simplified customs declarations for SMEs trading with EU
- Extended postponed accounting for import VAT to all goods
- New £20 million SME Export Support Fund
- Double tax relief for businesses expanding to new markets
- Reduced paperwork for short-term business trips to EU
Employment and Skills Development
Apprenticeship Incentives
£3,000 payment for hiring new apprentices extended until July 2025
Skills Bootcamps
£550 million expansion for flexible training programs
Returnerships
New initiative to encourage over-50s back into workforce
The National Living Wage will increase to £11.44 per hour from April 2025, affecting businesses with employees aged 21 and over. This represents a significant increase in payroll costs that businesses should budget for.
Sector-Specific Measures
| Sector | Key Measures | Impact |
|---|---|---|
| Retail | Business rates relief, high street investment fund | Reduced overheads, regeneration support |
| Hospitality | VAT discount extended on tourism, reduced alcohol duty | Lower costs, increased competitiveness |
| Manufacturing | Energy bill support, super-deduction for machinery | Lower production costs, investment incentives |
| Creative Industries | Enhanced tax relief for film, TV and video games | Increased support for UK productions |
| Technology | R&D credits, scale-up visa scheme expansion | Innovation support, access to talent |
Implementation Timeline
April 2025
National Living Wage increase
Employment Allowance permanent
July 2025
Apprenticeship incentives end
Green grants open
January 2026
MTD for ITSA begins
New customs procedures
Action Points for SMEs
- Review eligibility for enhanced R&D tax credits for digital projects
- Assess business rates position and apply for available reliefs
- Plan for National Living Wage increase in April 2025
- Evaluate green investment opportunities with new incentives
- Consider digital skills training to utilize new tax credits
- Review international trade processes for simplification benefits
- Budget for increased wage costs from April 2025
- Prepare for Making Tax Digital implementation in 2026
- Evaluate energy efficiency improvements with new incentives
- Review supply chains for potential Brexit simplification benefits
- Consider timing of capital investments to maximize allowances
Need Help Understanding How the Spring Statement Affects Your Business?
Our tax specialists can help you navigate the changes, identify opportunities, and ensure compliance with the new measures announced in the Spring Statement 2025.
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