Implications for Businesses and BIDs
The UK Government’s Spring Statement 2025, delivered on 26 March by Chancellor of the Exchequer Rachel Reeves MP, outlined its Plan for Change – a strategy to drive economic growth, invest in public services, and strengthen national infrastructure. Key measures, such as investment in skills, planning reform, and infrastructure, have significant implications for business taxation, high street rates, small and medium-sized enterprises (SMEs), and local economic development. Notably, the Government confirmed that an interim report on the long-term reform of the business rates system will be published in summer 2025. The team will be monitoring this closely, given the importance of business rates to town centres and the operational environment for Business Improvement Districts.
Taxation Changes Affecting Businesses
- R&D Tax Relief Reform
Consultations launched to expand advance clearances and reduce fraud in R&D claims. A separate review is exploring advance certainty for major investments (p. 37). - Abolishing Non-Dom Status
From April 2025, non-dom tax rules will be replaced with a residence-based regime. UK tax residents will be taxed on worldwide income, aligning with fairness and transparency goals (p. 28). - Stable Corporate Tax Regime
No change to the 25% headline rate. The Corporate Tax Roadmap (Oct 2024) remains in force. Reviews underway on how to enhance schemes like EIS, VCT and EMI (p. 28). - Digital Tax and Compliance Measures
- Making Tax Digital (MTD) for Income Tax Self-Assessment will extend to taxpayers earning over £20,000 from April 2028 (p. 20).
- Penalties for late payments will increase to improve compliance (p. 20).
- HMRC enforcement boosted by 500 new compliance officers, plus new consultations on avoidance scheme promoters and adviser misconduct (p. 20).
- Sector-Specific and Trade Measures
- A new Statutory Levy on gambling operators will fund addiction services (p. 33).
- Tariffs on 89 business-critical imports will be suspended for two years under CPTPP (p. 33).
Business Rates and Reliefs
- Business Rates Reform Ongoing
Interim report expected summer 2025. Long-term reform proposals to modernise revaluations and rate reliefs will be explored further in the Autumn Budget (p. 28).
Support for SMEs and Key Sectors
- SME Financing and Investment
No new SME tax cuts, but continuity in schemes like Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), and Enterprise Management Incentives Scheme (EMIS) is confirmed, with potential for future expansion (p. 28). - Parental Leave Reimbursement Boost
Small Employers’ Relief will rise to 8.5% from April 2025, up from 3%, helping SMEs meet statutory parental pay obligations (p. 33). - Export and Defence Opportunities
UK Export Finance expansion and defence R&D funding will open opportunities in manufacturing, defence, and infrastructure sectors (p. 15). - No New Investment Zones
While no new zones were introduced, national policies (planning reform, skills, and housing investment) aim to support regeneration across all regions.
Skills Development and Workforce Support
- £625m Construction Skills Package
- £100m for 35,000 Skills Bootcamps (p. 29)
- £40m for 10,000 Foundation Apprenticeships (p. 29)
- £165m for construction courses in FE colleges (p. 29)
- £100m to launch 10 new Technical Excellence Colleges (p. 29)
- £32m for CITB-backed SME apprenticeship support (p. 29)
- Employment and Inclusion Funding
£1bn per year from 2029–30 to support those with health barriers into work. Combined with Universal Credit reforms, this aims to improve workforce participation (p. 23).
Planning, Infrastructure, and Regulation
- Planning Reform to Accelerate Development
- Streamlined approvals for critical infrastructure and housing (p. 28)
- Modernised environmental rules to reduce project delays (p. 27)
- Cross-boundary coordination to support major regional developments (p. 27)
- Economic Impact of Reform
Office of Budget Responsibility (OBR) expects planning reforms to deliver 170,000 new homes, increasing GDP by 0.2% by 2030, and 0.4% by 2034–35 (p. 8–9). - £13bn Infrastructure Investment Boost
Includes housing, transport, energy and digital projects. £2bn earmarked for affordable housing in 2026–27 to support delivery of 1.5 million new homes (p. 1, 33). - Regulatory Overhaul and Industrial Strategy
The Statement reinforces a “modern industrial strategy” with growth focused on AI, advanced manufacturing and clean energy. The new National Wealth Fund and AI Opportunities Action Plan support this ambition (p. 3). - Tax Enforcement and Levelling the Playing Field
HMRC will recruit 600 more staff to close the tax gap, focusing on high-risk sectors and international non-compliance. This aims to ensure fair competition (p. 20–22).
Conclusion
The Spring Statement 2025 sets a clear direction: national growth through investment in infrastructure, skills and planning reform – supported by a stable tax environment and stricter compliance. For BIDs and high street economies, continued business rates relief, construction-driven regeneration, and enhanced workforce participation will strengthen local vitality.
