On 3rd March 2026, the Chancellor announced the Spring Statement in which she delivered an update on the government’s plans for the UK economy.
Our tax team summarise the key takeaways from the Spring Statement 2026 and highlight the various changes taking effect from April that business owners should be aware of.
Economic outlook
The Office for Budget Responsibility (OBR) indicated that GDP will increase by 1.1% in 2026, which is down from 1.4% from the forecast provided in the 2025 Autumn Budget.
Further updated growth forecasts show that faster growth of GDP is expected in following years and will increase by 1.6% in 2027 and 2028, then by 1.5% in both 2029 and 2030.
Inflation
The OBR projects that inflation will fall from 3.4% in 2025 to 2.3% in 2026, and then again to 2% from 2027 onwards, with this year’s target forecast to be met in late 2026. This means the UK would meet its target sooner than the OBR originally predicted following the Autumn Budget, when the OBR a rate of 2.5% was forecast for in 2026.
The decisions the Chancellor took at the last Budget to ease the cost of living, including reducing people’s energy bills by £150 and freezing rail fares, are expected to aid in bringing down inflation in 2026-27.
Tax increases remain unchanged
No further tax increases or changes were announced in the Spring Statement; however, some changes have been amended since they were first announced in the Autumn Budget. Here is a reminder of the key changes coming into effect in April 2026 that are set to impact business owners.
Business Property Relief (BPR) and Agricultural Property Relief (APR)
The changes originally proposed would have reduced both BPR and APR to £1 million, yet on 23rd December it was announced that the maximum 100% relief rate will instead apply to the first £2.5 million.
Spouses or civil partners will be able to pass on up to £5 million in qualifying agricultural or business assets between them before paying inheritance tax.
You can read about these changes in more detail in our previous article here: Changes to BPR and APR in 2026: what businesses need to know
Tax rate changes to dividends
From April 2026, the basic rate and higher rate of tax on dividends will increase by two percentage points to:
- 10.75% for basic rate taxpayers
- 35.75% for higher rate taxpayers
The additional rate remains unchanged.
Increase to National Living Wage
The National Living Wage for workers aged 21 and over will increase by 4.1% from 6th April 2026, rising to £12.71 per hour, which is equivalent to approximately £900 more per year for a full-time employee.
Minimum wage for those aged 18 to 20 will rise to £10.85 per hour. For 16 to 17-year-olds, as well as apprentices, the minimum wage will increase to £8.00 per hour.
Capital Gains Tax
Capital Gains Tax (CGT) relief on business sales to Employee Ownership Trusts (EOTs) will be decreased from 100% to 50%. For more information regarding the changes to EOTs, read our article here.
Capital allowances: writing-down allowances rate reduction
The government is reducing the main rate of writing-down allowance for plant or machinery from 18% to 14%. This reduced rate will be effective from 1st April 2026 for corporation tax and 6th April 2026 for income tax.
Making Tax Digital for Income Tax starts in April 2026
From April 2026, HMRC will be introducing Making Tax Digital for Income Tax which will change the way some business owners submit tax returns. You can read more about these changes in full in our article here.
Get in touch
Our specialist tax team can provide further information and tailored advice regarding the key changes coming into effect in April. Get in touch with us to discuss your needs with one of our experts today.
