Chancellor Rachel Reeves has delivered her first Spring Budget, outlining the government’s financial plans for the year ahead. With updates on public spending, tax compliance, benefits, housing, business rates, and savings reforms, there’s a lot to take in.
At Venton, we know that budgets can sometimes feel overwhelming, so we’ve broken down the key takeaways in a way that’s easy to understand and relevant to you.
1. Slower Economic Growth – A Tougher Year Ahead
The UK economy is now forecast to grow by just 1% in 2025, down from the previous 2% prediction. This means that businesses could face slower investment, hiring freezes, and reduced consumer spending, while households may feel the pinch if wages don’t keep pace with inflation.
For business owners, this could be the time to review budgets, assess cash flow, and plan ahead to navigate what might be a tougher economic environment.
2. Public Spending Cuts & Deficit Reduction – What’s Changing?
The government has set out a plan to cut the budget deficit from £36.1bn in 2025-26 to a £9.9bn surplus by 2029-30. This means that while public finances may improve, there could be less money for public services and infrastructure projects.
If your business relies on government contracts, grants, or public sector clients, it’s worth keeping an eye on any changes that could impact funding.
3. Welfare Reforms & Universal Credit Changes
The government is making £14bn in cuts to welfare spending, with a particular focus on Universal Credit.
- Universal Credit standard allowance is increasing, which is good news for claimants.
- However, the health-related element of Universal Credit is being reduced, meaning people with long-term health conditions may receive less support.
For businesses, this could mean changes to employment support schemes and potential shifts in workforce availability. If you employ staff on lower incomes, it’s worth understanding how these changes could affect them.
4. Tax Compliance Crackdown – Businesses Under More Scrutiny
The government is aiming to clamp down on tax evasion and avoidance, with new measures expected to raise £1bn in additional revenue.
- Penalties for tax evasion will increase by 20%, meaning businesses must ensure they are fully compliant.
- HMRC will have more funding to investigate tax avoidance, meaning audits and compliance checks could become more common.
If you run a business, now is the perfect time to review your tax position and ensure everything is in order to avoid unexpected fines or penalties. We at Venton can help if you need advice.
5. Defence Spending Boost – £2.2bn for Security & Modernisation
The government is investing an extra £2.2bn into defence, focusing on modernising military equipment and national security measures.
While this won’t directly affect most businesses, it could create opportunities for companies in the defence, tech, and manufacturing sectors, with new contracts and investment available.
6. Overseas Aid Budget Reduction – A Controversial Cut
The UK’s foreign aid budget is being reduced to 0.3% of gross national income, down from 0.5%. This will save £2.6bn by 2029-30, but it has been met with criticism from charities and international organisations.
For businesses with international links, particularly those working in development, charities, or overseas trade, these cuts could have indirect consequences.
7. Housing Development – Faster Planning Approvals
In a move to tackle the housing crisis, the government is making it easier for developers to build new homes faster.
- Planning rules will be relaxed to speed up large-scale housing projects.
- The goal is to build 1.3 million new homes over the next five years.
If you’re in the construction, real estate, or mortgage industries, this could mean new opportunities, though concerns remain about affordability and infrastructure.
8. ISA Reforms & Child Benefit Repayments – What You Need to Know
The government is reforming Individual Savings Accounts (ISAs), with potential caps on cash ISAs to encourage more investment in stocks and shares. Parents earning over the child benefit threshold will now be able to repay child benefits directly through their payslips, making it easier to manage repayments and avoid unexpected tax bills.
These changes could be important for savers and families managing their finances, so it’s worth reviewing your savings strategy and tax position.
9. Civil Service Job Reductions – 10,000 Roles to Go
To cut costs and improve efficiency, the government is planning to reduce the number of civil service jobs by around 10,000.
For businesses that rely on public sector contracts or services, this could lead to longer processing times and administrative delays in areas such as licensing, grants, and procurement.
10. Mortgage Rates – Possible Reductions Ahead?
With inflation expected to fall faster than previously thought, mortgage rates could come down sooner than expected.
- This would be good news for homebuyers and those remortgaging, as borrowing costs could become more affordable.
- However, rates are still higher than in previous years, so it’s important to shop around for the best deals.
If you’re considering buying a home, refinancing, or investing in property, now is a good time to start reviewing your options.
Final Thoughts – What This Means for You
The Spring Budget 2025 brings big changes across public spending, tax compliance, housing, and welfare, with knock-on effects for individuals and businesses alike.
Key takeaways:
- Businesses must prepare for stricter tax compliance rules.
- Public spending cuts could impact government-funded industries.
- Mortgage rates may start to ease, offering relief to homeowners.
- Housing development will accelerate, bringing opportunities and challenges.
At Venton, we know that these changes can affect your business, your finances, and your future plans. If you need clarity on how the Spring Budget impacts you, we’re here to help. Get in touch today for expert advice.