CHANCELLOR Rachel Reeves will deliver a Spring Statement on March 26.
This is different from the Budget, which is the big financial plan the Government announces, usually in the autumn of each year.
The Budget is when the Government reveals major decisions about taxes, spending, and policies.
Whereas, the Spring Statement is more like an update.
The Office for Budget Responsibility (OBR), which checks the country’s finances, has to publish two reports each year about how the economy and public finances are doing.
The Spring Statement is when the Chancellor talks about the OBR's latest report and explains it to Parliament.
Although this Spring Statement isn't intended as a major fiscal event, and the Treasury has stated there will be no policy announcements, there is speculation about potential changes given the current economic climate.
The Chancellor is under increasing pressure to address slow economic growth, high inflation and concerns about tax rises.
Inflation surged to 3% in January, marking its highest level in 10 months and significantly exceeding the Bank of England's 2% target.
At the same time, economic growth remains subdued, with the Bank of England forecasting the UK economy to expand by just 0.75% in 2025 - down sharply from an earlier estimate of 1.5%.
Growth is only expected to pick up in 2026.
While Rachel Reeves initially ruled out further tax increases on the scale of those seen in the Autumn Budget, she has since appeared to backtrack on her position.
Similarly, Prime Minister Sir Keir Starmer declined to confirm whether additional tax rises are on the horizon when pressed by journalists during his visit to Washington DC this week.
Of course, the full details of the Spring Budget will remain under wraps until the day it is unveiled.
However, we've outlined some of the key measures that could be on the cards.
From potential tax increases to adjustments to inheritance tax, here’s what might be announced on March 26.
INCOME TAX
Income tax is a tax you pay on your income, but only once you're earning over a certain amount.
Anything earned in a year up to £12,570 is known as your personal allowance and you're not taxed on that.
Beyond that, you are taxed a certain percentage depending on the amount you've earned.
If you earn £12,570 or less, you currently pay no income tax.
On earnings between £12,570 and up to £50,270, you pay the basic income tax rate of 20%.
Earnings above £50,271 is taxed at the higher rate of 40%.
The additional rate of income tax, which applies to earnings of £125,140 or more, is 45%.
These thresholds usually rise each year in line with inflation but were frozen under the previous Conservative government until 2028.
Frozen tax thresholds act as a "stealth tax," allowing the government to collect extra revenue without raising tax rates.
As wages increase due to inflation or other factors, more people will find their incomes pushed into higher tax brackets.
This phenomenon, known as "fiscal drag," leaves more people paying more taxes, thereby reducing their disposable income.
It's unlikely these thresholds will be unfrozen early, as Reeves previously committed to them rising with inflation after 2028.
NATIONAL INSURANCE
National Insurance contributions (NICs) are a tax you pay to qualify for certain state benefits, like the state pension, statutory sick pay, maternity leave, and unemployment benefits.
You pay NI if you're 16 or older and either employed and earning over £242 a week, or self-employed and making a profit of £6,725 or more a year.
It's deducted directly from your wages if you're employed.
Different "classes" of NI exist depending on your employment status and earnings.
However, National Insurance is also paid by employers and it's this tax that's been a hot topic since the Rachel Reeves delivered her Autumn Statement last year.
Back in October the Chancellor announced that from April 6, employer NICs will increase by 1.2% to 15%, and the threshold at which employers start paying NICs will decrease from £9,100 to £5,000 a year.
These changes, combined with the rise in the National Living Wage, have caused businesses to warn of a battering.
Combined with the increase in the National Living Wage, businesses have cautioned that these changes will deliver a significant financial blow.
Although the Treasury has yet to signal any intention of reversing course, it is not beyond the realm of possibility that relief measures for employers might be unveiled in the upcoming Spring Statement.
This could include a higher Employment Allowance or a raised NIC threshold.
Relief for charities facing higher NICs is also a possibility.
INHERITANCE TAX
Inheritance tax is typically not payable if the value of your estate falls below the £325,000 threshold, a limit that has been frozen until 2030.
You can also avoid inheritance tax if you leave everything above the threshold to your spouse, civil partner, a charity, or a community amateur sports club.
Even if your estate is below the £325,000 threshold, you are still required to report it to HMRC.
If you pass your home to your children—including adopted, foster, or stepchildren - or grandchildren upon your death, your inheritance tax threshold can increase to £500,000.
This is known as the "main residence" band.
For married couples or those in civil partnerships, if the value of your estate is below the upper limit, any unused portion of your threshold can be transferred to your partner upon your death.
This means their combined inheritance tax threshold could reach as much as £1million.
This means their threshold can be as much as £1million.
The standard inheritance tax rate is 40%, but this only applies to the portion of your estate that exceeds the threshold.
For instance, if your estate is valued at £500,000 and your tax-free threshold is £325,000, inheritance tax would be charged at 40% on the remaining £175,000, amounting to £70,000.
In her Autumn Statement, Rachel Reeves introduced a new 20% levy on agricultural land and equipment worth over £1million that is passed on after death.
From April 2026, a £1 million cap will apply to the combined value of agricultural and business assets that qualify for 100% inheritance tax relief. Any amount exceeding this threshold will now be subject to tax.
While the portion above £1 million will still benefit from some relief, it will be taxed at an effective rate of 20% - a reduction from the standard 40% inheritance tax rate but a significant departure from the full 100% relief currently available.
This change means that estates which previously incurred no inheritance tax on agricultural or business assets may now face a tax liability.
The new levy has provoked strong opposition from the farming community, who argue that it could place an unfair burden on agricultural families.
However, there is growing speculation that the Government may consider adjustments to these planned changes before their implementation in April 2026.
One potential revision could include increasing the £1million limit on agricultural and business property relief.
STAMP DUTY
Stamp Duty Land Tax (SDLT) is a one-off payment required when purchasing a property or piece of land valued above a certain threshold.
Since 2022, both first-time buyers and other homebuyers have benefited from temporary stamp duty relief, which raised the thresholds at which the tax becomes payable.
Currently, first-time buyers are exempt from paying stamp duty on properties priced up to £425,000.
For properties valued above this, they pay tax at a rate of 5% on the portion between £425,000 and £625,000.
This relief was introduced in 2022, temporarily increasing the lower exemption threshold for first-time buyers from £300,000 to £425,000. At the same time, the maximum property value eligible for first-time buyer relief was raised from £500,000 to £625,000.
For all other buyers, the threshold at which stamp duty becomes payable was also increased, doubling from £125,000 to £250,000.
These enhanced thresholds are set to revert to their previous levels in April 2025 unless the Government decides to extend them.
During her Autumn Statement, Rachel Reeves stopped short of announcing an extension to these measures.
While the Treasury has confirmed that the thresholds will return to their earlier levels, the timing of Reeves' Spring Budget - just days before the changes are due to take effect - has sparked speculation that a last-minute reversal may still be on the table.
CASH ISAs
Each year, individuals can deposit up to £20,000 into an Individual Savings Account (ISA), with any returns - regardless of the amount - remaining entirely tax-free.
Cash ISAs remain the most popular tax-free savings product, operating much like a traditional savings account where your funds are held as cash.
They are considered a safer option compared to stocks and shares ISAs, as your capital is not subjected to market fluctuations.
This guarantees that you will always receive back at least the amount you initially deposited.
As with all ISAs, any income or gains generated within a cash ISA are completely tax-free.
This sets them apart from regular savings accounts, where interest earned is subject to tax once it exceeds the personal savings allowance (PSA).
Basic rate taxpayers are required to pay tax on interest earned above £1,000 per year, while higher-rate taxpayers must do so once their annual interest exceeds £500.
Additional rate taxpayers, who are taxed at 45%, receive no allowance at all and must pay tax on all interest earned.
However, the future of cash ISAs has recently been called into question.
The future of cash ISAs has recently come under scrutiny.
Speculation has been growing in recent weeks that Chancellor Rachel Reeves may alter the rules around these lucrative savings accounts.
This comes amid calls from City lobbyists to abolish cash ISAs entirely, to help encourage people to invest their savings into stocks and shares ISAs instead.
Others have proposed a drastic reduction in the annual tax-free allowance, slashing it from £20,000 to as little as £4,000.
With this potential tax grab in mind it's important to make sure you use as much of the current £20,000 a year allowance before the new tax year.
LIFETIME ISAs
Lifetime ISAs are often used by first-time buyers to get on the property ladder.
But the home must cost less than £450,000 - a threshold that has remained the same since 2017 despite rising house prices.
If savers use the money to buy a property that is over the scheme's £450,000 limit they face a 6.25% withdrawal penalty.
This means that someone who has saved £20,000 could face only getting back £18,750 of their money if they choose to take it out.
Consumer rights advocates have long urged the Government to reduce the LISA withdrawal penalty and raise the property price cap.
With house prices soaring in recent years, many LISA holders have found themselves exceeding the £450,000 property limit, leaving them unable to use their savings without incurring hefty penalties.
The previous Conservative Government stopped short of addressing these issues, and Rachel Reeves made no reference to the matter during her Autumn Statement, disappointing campaigners further.
VAPE DUTY
Back in October, Rachel Reeves announced a significant increase in rates for all tobacco products, aligning them with the Retail Price Index (RPI)—a measure of inflation—plus an additional 2%.
As a result, the average price of a 20-pack of cigarettes, which stood at £15.88 in September according to the ONS, jumped to £16.78 overnight.
The rate for hand-rolling tobacco saw an even steeper rise, increasing by the same RPI rate plus a substantial 12%, amounting to a total increase of 15.65%.
Reeves also unveiled plans for a new tax on vaping products.
From 1 October 2026, a Vaping Products Duty will be introduced at a flat rate of £2.20 per 10ml of vaping liquid.
This will be accompanied by a further one-off increase in Tobacco Duty to preserve the financial incentive for smokers to transition from tobacco to vaping.
It’s not uncommon for governments to accelerate proposals in a bid to bolster public finances.
There is speculation that the introduction of the Vaping Products Duty or additional increases in Tobacco Duty could be brought forward sooner than initially planned.
However, the full details of the Spring Budget will remain under wraps until the day it is unveiled.
What's already changing after the Spring Budget?
Rachel Reeves has already confirmed that the temporary 5p cut to Fuel Duty will remain in place for the next financial year.
This decision was originally announced in her Autumn Budget and will continue to apply in the next financial year.
Drivers have benefited from frozen Fuel Duty rates since 2011, thanks in part to the successful campaign by The Sun in partnership with FairFuelUK to protect consumers from rising costs at the pump.
In other positive news, millions of workers are set to receive a pay rise of approximately £1,400 a year from 2025, as the Government will increase the National Living Wage by 6.7% from 1 April.
State pensioners are also set to benefit, with payments rising by up to £473 under the Triple Lock.
Additionally, millions of households will see an uplift in benefit payments from April, providing further financial support to those in need.
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