Spring Statement 2026 - at a glance

Stability today, pressure tomorrow for businesses and individuals

The Chancellor’s Spring Statement on 3 March 2026 was deliberately low-key. With the government committed to one major fiscal event each year, the Statement acted primarily as a progress update on the UK economy rather than introducing major new tax policy.

However, while there were few fresh announcements, the underlying message is clear, that significant tax and regulatory changes already confirmed will begin taking effect from April 2026 onwards, with further reforms scheduled over the coming years.

For businesses and individuals alike, the direction of travel is becoming clearer sharing higher compliance requirements, rising tax pressures and an increasing need for forward planning.

The economic outlook

The Office for Budget Responsibility (OBR) forecasts UK growth of 1.1% in 2026, followed by 1.6% growth in 2027 and 2028 and 1.5% in 2029 and 2030.

Inflation is expected to fall towards the Bank of England’s 2% target by 2027, while unemployment is forecast to peak at around 5.3% in 2026 before declining again.

Borrowing has also improved slightly, with government borrowing forecast to fall by almost £18bn compared with the Autumn forecast.

Despite this, the broader fiscal picture remains challenging. The UK tax burden is projected to reach around 38% of GDP by the end of the decade, driven largely by frozen tax thresholds and previously announced tax changes.

Phil Grainger, Managing Director at Ward Williams, said:

“The Spring Statement was never intended to be a major policy event, but it does reinforce the government’s direction of travel. Stability is the headline message, but beneath that there is a growing tax burden and a series of structural changes that businesses and individuals need to prepare for.”

What this means for businesses

While the Statement itself introduced few new tax measures, a number of previously announced changes begin taking effect from April 2026, which will affect business costs, investment decisions and hiring plans.

These include:

• National Living Wage rising to £12.71 per hour
• Employer National Insurance remaining at 15%
• Business Asset Disposal Relief tax rate increasing from 14% to 18%
• Making Tax Digital for Income Tax beginning for some sole traders and landlords
• Changes to capital allowances including a reduction in the main rate Writing Down Allowance to 14% and the introduction of a new 40% first-year allowance for qualifying assets
• Expansion of investment schemes such as Enterprise Investment Scheme (EIS) and Enterprise Management Incentive (EMI) scheme to support investment and employee share ownership in growth businesses
• 100% IHT relief for agricultural and business property is limited to a combined £2.5 million cap. Amounts over this threshold will receive 50% relief

Andy Webb, Business Services Director, said:

“For many SMEs the challenge is not one major policy change but the cumulative impact of several smaller ones. Rising employment costs, new compliance requirements and changes to tax reliefs all add pressure. Businesses should be reviewing their cash flow, pricing and investment plans now rather than waiting until the changes take effect.”

The government has also signalled that future economic growth will be driven by innovation, AI adoption and global trade relationships, while investment incentives such as Enterprise Investment Scheme and Venture Capital Trust limits have been expanded.

Kath Van Eyken, Corporate Services Director, commented:

“The expansion of EIS, VCT and EMI limits is a positive step for growth businesses and investors. These schemes remain some of the most powerful tools available for raising capital in the UK. For companies looking to scale or innovate, the increased limits create more flexibility around funding and employee incentives.”

From a governance and assurance perspective, regulatory expectations are also increasing.

Colin Hamilton, Corporate Services Director, said:

“For larger businesses and those approaching audit thresholds, the key message is preparation. As regulatory requirements and tax reporting obligations continue to evolve, strong financial reporting and governance processes become even more important.”

What this means for individuals and families

The Spring Statement also reinforced a number of tax changes affecting individuals and families.

Income tax thresholds remain frozen until April 2031, continuing the effect of fiscal drag.

At the same time, the government has confirmed:

• Dividend tax rates rising by 2% from April 2026
• Separate tax rates for savings and property income from 2027
• Inheritance tax thresholds remaining frozen
• Unused pension funds being brought into estates for inheritance tax from April 2027

Simon Boxall, Tax Director, said:

“The combination of frozen tax thresholds and rising investment tax rates means more individuals will find themselves paying higher tax over time. For higher earners and those with significant investment income, reviewing tax planning strategies has become increasingly important.”

Estate planning will also become more significant following changes to inheritance tax rules affecting pensions and business assets.

Malcolm McKinnell, Estate Planning Director, said:

“The upcoming changes to inheritance tax, particularly bringing pension funds into the estate from 2027 and the cap on agricultural and business property relief, mean many families will need to revisit their long-term estate planning strategies. These rules could significantly affect how wealth is passed between generations.”

Planning ahead

Although the Spring Statement itself contained relatively few surprises, it confirmed the direction of UK fiscal policy.

Businesses face higher operating costs and increasing compliance obligations, while individuals face continued fiscal drag and evolving inheritance tax rules.

Phil Grainger added:

“The key takeaway from this Statement is that planning ahead has never been more important. Whether you are running a business, investing for the future or thinking about succession planning, understanding how these changes interact is essential.”

If you would like to discuss how the Spring Statement may affect you or your business, please speak to your our Ward Williams team on 01932 830664 or get in touch enquiries@wardwilliams.co.uk