Chancellor Rachel Reeves presented the Spring Statement 2026, offering an expectedly technical and informative overview. With major changes now reserved for Autumn budgets, the Spring Statement has reverted to its original role: providing an update on the economy rather than revealing new tax policies.
In this summary, we focused on the points that may affect self-employed individuals, high earners, landlords, and small business owners.
No new tax changes
The Chancellor confirmed there are no new tax rises or cuts in this statement. The measures announced in the Autumn Budget (which we covered previously) will therefore continue as planned.
Economic outlook
The Office of Budget Responsibility has slightly downgraded its 2026 growth forecast to 1.1% (down from 1.4%). However, inflation is still expected to fall back to the 2% target by next year.
Fiscal headroom
Stronger-than-expected tax receipts in January have provided the Treasury with an additional £23.6bn of fiscal headroom, although there are currently no plans to allocate this.
Although today’s announcement was relatively quiet, several significant changes announced in the Autumn Budget will take effect this April. If you have not yet planned for these, now is a good time to do so.
Dividend tax increase
Dividend tax rates will rise by 2%, increasing to 10.75% for basic-rate taxpayers and 35.75% for higher-rate taxpayers. The additional rate remains at 39.35%.
If you operate through a limited company, you need to make estimates of your expected profits and make provisions for an increase in dividend tax liability.
Inheritance tax reforms
New restrictions on Agricultural Property Relief (APR) and Business Property Relief (BPR) will take effect from 6 April.
Frozen personal tax thresholds (“fiscal drag”)
Personal tax thresholds remain frozen until 2031. As incomes gradually rise over time due to pay increases or inflation, more individuals will be subject to higher tax rates. This means even without new tax rises, people can end up paying more tax as a greater portion of their income is taxed at higher rates.
What does this mean in practice?
For most people, a “quiet” statement is generally welcome news, as it means no unexpected tax changes. However, with fiscal drag continuing to increase the overall tax burden and economic growth forecasts remaining modest, it may feel as though the Government is focused more on stabilising public finances than easing pressure on household finances. In short, it’s a stable approach, even if the wider economic outlook still feels somewhat uncertain.
As the economic landscape evolves, staying informed is essential. Lera Accountancy is committed to guiding you and ensuring your tax affairs are in good order.
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