Today’s Spring Statement didn’t bring any major tax changes, but it did offer an update on the UK’s finances, benefits system, and what might lie ahead. Here’s a breakdown of the main points.
No New Tax Announcements
As expected, there were no changes to personal or business taxes announced today. It’s likely any major moves will come later in the year – possibly just before the next general election.
UK Growth Forecast Halved
The Office for Budget Responsibility (OBR) now expects the UK economy to grow by only 0.6% in 2024 – down from the 1.1% forecast made last autumn. This slower growth is largely due to the impact of higher interest rates and a squeeze on household budgets.
Inflation Set to Drop
Inflation is expected to fall below the government’s 2% target by the summer, which could ease some pressure on the cost of living. If that happens, we may also see interest rate cuts later in the year.
Benefits and Welfare Changes
There were a few important updates to the benefits system:
- Stricter rules for Universal Credit claimants: People who haven’t found work after 18 months may now be required to take part in mandatory work placements – or face having their benefits stopped.
- Focus on getting people back into work: The Chancellor is pushing ahead with reforms aimed at reducing long-term sickness benefits and encouraging more people back into employment.
- No major increases to benefit payments: While cost-of-living pressures remain, there were no fresh announcements on raising benefit levels today.
Public Finances Still Tight
Government borrowing has come in higher than expected, which means there’s less room for big spending or tax giveaways – at least for now. The Chancellor made it clear that keeping spending under control is still a priority.
Looking Ahead
Today’s statement was more of a financial update than a policy shake-up. The bigger changes – including any possible tax cuts or spending boosts – are likely to come in the full Budget later this year.
PaperRocket are a multi award winning Chartered accounting practice, and Accredited FreeAgent Practitioners.
We specialise in providing friendly, non-accounting jargon, services for contractors, freelancers, sole traders, and landlords across the UK.
Our fixed fee monthly accounting packages all include a FreeAgent subscription as standard and unlimited support from your allocated accountant.
To find out how we can help you please get in touch now.
