Spring Statement 2026: what’s changing for small businesses

Emily Coltman FCA
Chief Accountant

Chancellor Rachel Reeves issued a steady-as-she-goes Spring Statement set against growing uncertainty caused by the conflict with Iran and rising oil prices.

Focusing her speech on the need “for security, for stability and growth”, the Chancellor made no major new policy announcements. However, small businesses will have lots of change to contend with from next month as many of the policy changes from the Autumn Budget come into force - including rising minimum wages, frozen personal tax thresholds and changing business rates.

The Office for Budget Responsibility (OBR) downgraded predicted growth for the UK economy in 2026 from 1.4% to 1.1%. But the updated growth forecasts are increased for the following years - 1.6% for 2027 and 2028, and 1.5% for 2029 and 2030. Unemployment is expected to peak at 5.3% this year and then fall gradually to 4.1% by 2030. According to the OBR’s latest predictions, inflation will hit the government’s 2% target in late 2026, down from the current rate of 3%. 

But none of the OBR’s predictions have taken into account the potential impact of the latest conflict in the Middle East. Oil prices have already risen to the highest level in a year, which could have a knock-on effect on inflation.

While the Chancellor announced no new policies in today’s speech, there are a raft of changes coming into effect in April which will have an impact on small businesses. Here are our key takeaways and reminders.

Making Tax Digital for Income Tax: no last-minute changes

Today’s speech was the very last chance saloon for anyone hoping to see a rethink or delay in HMRC’s changes to how most sole traders and landlords will report their income and expenses. Making Tax Digital (MTD) for Income Tax is set to go ahead as previously confirmed, starting from 6th April. For information on whether MTD for Income Tax will affect you, and how to get ready if it does, check out our collection of easy-to-understand information, deep-dive guides and webinars. 

Freeze on personal tax thresholds remains, pulling more into higher tax bands

In November, the Chancellor confirmed that headline Income Tax and National Insurance (NI) rates on earned income would not change. That remains the case. 

However, the current freeze on Income Tax and NI thresholds will also stay in place until 2030-31. When the thresholds at which people pay different rates of Income Tax and National Insurance stay static rather than rising with inflation, more people can be pulled into paying higher rates over time as their wages rise with inflation - this is known as ‘fiscal drag’.  

You can see the current rates and thresholds on our UK tax rates tracker page including rates for Scotland, which sets its own bands. The Scottish Government recently confirmed its budget which will mean changes to Income Tax thresholds from April. 

Changes to Class 2 National Insurance

As previously announced, the Small Profits Threshold - the profit level below which sole traders can opt to pay Class 2 NI contributions voluntarily - will increase to £7,105, with the rate of Class 2 NI being £3.65 per week, from 6th April.

Tax rates on dividends rise

From April, there will be a 2% increase to the basic and higher rates of Income Tax on dividend income, taking them up to 10.75% and 35.75% respectively. The additional rate remains unchanged at 39.35%.

National Living Wage and National Minimum Wage rise

From April, the minimum wage for those aged over 21 (the National Living Wage) will rise to £12.71 an hour - an increase of 50p. For under-18s and apprentices, the National Minimum Wage rate rises to £8 and for 18 to 20-year-olds it rises to £10.85. Businesses will have to factor in the resulting pay rises for nearly 2.7 million eligible workers.

Free apprentices for small businesses in England

In November, the Chancellor announced plans to help small businesses to take on young apprentices, with fully funded apprenticeships for eligible people under 25. More details of the £725m package were announced in December and some elements of the scheme start rolling out from April. 

UK business property revaluation

From April, business rates bills in England, Wales and Scotland will be updated to reflect changes in property values since the last revaluation in 2023. This may mean increased bills for some businesses whose property has increased in value. Northern Ireland’s revaluation has been paused following concerns from the hospitality sector.

Business rates changing across the UK

The business rates multiplier - the figure used to calculate the amount of business rates a non-domestic property owner must pay - will change across the UK. Here are the updated rates for England, Scotland and Wales. In Northern Ireland, rates vary by council area. The Executive has confirmed an increase of 3% for non-domestic properties in Northern Ireland.

Each of the UK nations has also put in place initiatives to help support small businesses and those from specific sectors. In England, small businesses and those from the retail, hospitality and leisure (RHL) sector will benefit from special rates (see our November Budget blog for details). In Scotland, smaller RHL businesses will be eligible for 15% relief. Wales will move from having two rates multipliers to five new bands, based on property type and rateable value. This list details the support available in Northern Ireland.

Increases to Corporation Tax late filing penalties

The penalty will double for taxpayers submitting a Corporation Tax return late from 1st April 2026. This means initial penalties rise from £100 to £200, with further penalties for three-month delays increasing to £400. Repeat offenders face a fine of up to £2,000 for three successive late filings. You can find more information in the government’s policy paper.

You can find out more about the OBR’s forecast for the UK economy in the full Economic and fiscal outlook report.