A leading Cumbrian accountancy firm said it was concerned that the Spring Statement offered no direct support for businesses.
Lamont Pridmore said despite the Government’s focus on balancing the budget and stimulating growth, businesses across the UK were left to shoulder the burden of rising taxes, higher employment costs, and expanding compliance requirements, with no new reliefs or incentives to drive growth and innovation.
While additional spending in areas like defence and housing was announced, many businesses would need to find ways to adapt to these challenges independently.
“Businesses have been left to fend for themselves, with no indication of how the Government plans to support them through this challenging period,” said Graham Lamont, chief executive of Lamont Pridmore.
“The lack of measures to help businesses absorb the increased costs introduced in the Autumn Budget and ensure long-term sustainability is deeply worrying.
“Many will be forced to make tough decisions, including reducing staff or scaling back investments.”
Regardless of the lack of relief for business, there is still an optimistic outlook for the economy, with revised GDP growth forecasts showing improvements each year from 2026 to 2029.
By the end of the forecast period, the economy is projected to be larger than previously anticipated in the Autumn 2024 Budget.
While the Chancellor assured that there would be no further tax increases, she made clear that the Government is focused on cracking down on tax evasion.
Through continued investment in HMRC’s technology and a 20% increase in the number of tax fraudsters charged each year, the Government plans to raise an additional £1 billion in revenue.
“While reducing tax evasion is important, this strategy will likely place even more pressure on businesses,” said Graham.
“With the Government investing heavily in HMRC’s capacity to track down tax fraud, businesses can expect more audits and greater scrutiny of their tax affairs.
“This will increase the risk of errors and potential penalties for companies, further complicating an already difficult business environment.”
A key point not addressed in the Chancellor’s speech, but outlined in the broader Spring Statement document, is Labour’s plan to expand Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA).
It has been confirmed that from April 2028, sole traders and landlords with annual incomes over £20,000 will be required to submit quarterly updates to HMRC regarding income and expenses. Additionally, anyone already using the scheme will face harsher penalties for late payments starting this April.
“For many small businesses, sole traders, and landlords, the reduction of the threshold to £20,000 represents an increase in the administrative burden,” Graham added.
“This change could mean more work and higher compliance costs for small businesses that may not be equipped to handle the technical demands of MTD without support, training and possibly new systems.”
Alongside the fiscal measures announced in the Spring Statement, rumours before the speech suggested that the Government was considering instituting a £4,000 annual cap on cash ISA contributions.
Investors currently benefit from a £20,000 tax-free allowance, which can be split between cash ISAs and stocks and shares ISAs.
While the Chancellor did not confirm any changes to the ISA structure in her statement, the Government has been looking at reforms to encourage more investment in equities, aiming to boost retail investment and support long-term growth.
The proposed reforms could have significant implications for savers who currently rely on cash ISAs as a safe haven for their funds.
“There is concern that a cap on cash ISAs could discourage individuals from saving in a secure, low-risk environment,” Graham warned.
“For businesses, this could lead to a shift in investment behaviour, with potential impacts on the broader economy and consumer spending.”
Although Wednesday’s announcement may not have brought any major surprises, businesses should not become complacent.
“Now is the time for business owners and individuals to evaluate their current position, reassess their planning strategies, and work closely with their accountant to prepare for what lies ahead,” concludes Graham.
- For businesses seeking guidance on managing the challenges of rising taxes, compliance requirements, and the upcoming Making Tax Digital changes, contact Lamont Pridmore by visiting www.lamontpridmore.co.uk.
