The Chancellor’s 2025 Spring Statement has been delivered, and with it comes a range of fiscal measures and policy updates that will directly affect UK business owners. From tax reforms to funding support, it’s crucial to understand how these changes could impact your operations, cash flow, and long-term strategy. To this end, the experts at Voscap have broken down the key highlights and what they mean for your business.
1. Corporation Tax Frozen – For Now
One of the biggest reliefs for business owners is the announcement that Corporation Tax will remain at 25%, following speculation of a potential increase. This provides some short-term stability for companies already grappling with rising costs. However, the Chancellor warned that further reviews are likely in the Autumn Budget, so it’s wise to plan ahead and model different tax scenarios.
2. Boost for SMEs: Extended Full Expensing
In a bid to stimulate investment, full expensing has been extended to 2027. This means businesses can continue to deduct 100% of qualifying capital expenditure from their profits. For SMEs investing in new equipment, vehicles, or IT infrastructure, this could translate into significant tax savings and improved cash flow.
3. New Funding for Green Innovation
With sustainability remaining a government priority, a £1.2 billion fund has been launched to support green innovation in small and medium enterprises. If your business is developing eco-friendly products or processes, you may be eligible for grants or low-interest loans. Now is the time to assess whether your sustainability efforts could qualify for this valuable support.
4. Business Rates Reform Delayed
Despite mounting pressure from the retail and hospitality sectors, comprehensive business rates reform has been delayed until 2026. However, the Chancellor did confirm a 12-month extension of the 75% relief for eligible high street businesses, which will be welcomed by many struggling with reduced footfall and increased energy bills.
5. VAT Threshold Increased
The VAT registration threshold has been increased from £85,000 to £90,000, effective from April 2025. This modest rise is aimed at reducing the compliance burden for the smallest businesses, though critics argue it falls short of addressing the broader challenges facing micro-enterprises.
6. Late Payment Crackdown
A new initiative to tackle late payments was also unveiled. Large businesses will be required to improve their payment practices or face exclusion from public contracts. This could help SMEs maintain healthier cash flow, which can prove critical for avoiding insolvency, especially in sectors with tight margins.
Conclusion
The 2025 Spring Statement offers a mixed bag for UK business owners. While some measures provide welcome support, particularly around tax relief and innovation funding, others simply kick the can further down the road. In uncertain economic times, maintaining financial resilience is more important than ever.
If your business is feeling the strain, it’s essential to seek professional advice early. As licensed insolvency practitioners, the experts at Voscap can help companies to assess their options—whether that’s restructuring, negotiating with creditors, or exploring insolvency solutions. To find out more, contact Voscap today on 020 7769 6831, or email help@voscap.co.uk.
