Spring statement opinion: ‘Shame there was no U-turn on the rise in National Insurance’
Chancellor Rachel Reeves delivered her Spring Statement this week. Rachael Chadwick-Harrison – managing director of Chadwick Accountants & Bookkeepers in Bidford looks at the impact it might have on the business sector?
“SO, the Spring Budget (let’s call it what it is) has landed… and let’s be honest, it wasn’t exactly a cause for fireworks and champagne, was it?
“There were no jaw-dropping announcements and, unfortunately, no U-turn on the imminent rise in employers’ National Insurance. That one stings - I know how much it affects so many of our clients. The knock-on effect? Fewer jobs, reduced hours and people having to work even harder just to stay afloat. Hardly a win, let alone a win-win.
“For some businesses (especially smaller ones), still feeling the aftershocks of Covid, this could be the final nail in the coffin.
“There were a few glimmers of common sense. I'm fully behind tightening up on benefits for those who can work; getting more people back into jobs is a positive move. I love the idea of using more AI and automation in government to reduce headcount and speed things up. And the reinforcement of Labour’s stated aim to stimulate house building and reform the planning process is good news for all. But party politics aside, my faith in the government actually pulling this off isn’t overwhelming.
“But don’t get me started on the decision to freeze the personal tax-free allowance again - now until 2028. They say it’s not a tax increase… but it is. With inflation biting, it means less real money in your pocket, and more of a lot of people’s income falling into the taxed bracket.
“Then there’s the change to the Making Tax Digital threshold - it’s been reduced to £20,000. I have mixed feelings on this one. On the one hand, it adds admin and extra accountancy fees for those not earning a huge amount. But on the other hand, it means more regular check-ins with HMRC, so no nasty surprises when the tax bill lands. Pros and cons.
“All in all? The Spring Statement wasn’t a disaster, but it certainly could have done more to help and incentivise the business sector.
“Roll on October. And let’s hope I will be writing an Ode To Autumn when the next Budget comes around.”
