In this week’s Enews, we look at warnings to the Chancellor ahead of the Spring Statement. There is also a warning to check state pension entitlements and government plans to cut red tape to update you on.
News - 21 March 2025
Chancellor should consider tax rises in the Spring Statement
Chancellor Rachel Reeves should consider increasing taxes at this month’s Spring Statement, according to the Resolution Foundation.
The Foundation noted that the UK’s economic outlook has declined markedly since the Budget last Autumn. Weaker growth and higher interest rate expectations look set to turn the UK’s projected current surplus of £10 billion into a deficit of around £5 billion.
This is likely to mean either cuts to public services, welfare, or tax rises.
The Foundation warned that any changes to Personal Independence Payments (PIP) and incapacity benefits must be handled very carefully so that the system is improved and able to support people back into work.
Instead, the think tank said, the government should raise taxes to meet the fiscal rules.
It says that extending the freeze in personal tax thresholds by a further two years to 2029-30 would raise around £8 billion. Such a measure would not affect living standards and would be paid for by wealthier families, it added.
James Smith, Research Director at the Resolution Foundation, said:
‘The Chancellor must act decisively to meet her fiscal rules.
‘Crucially, she should avoid turning the Spring Statement into a ‘sticking plaster’ Budget, with long-term thinking on welfare reform undermined by the quest for short-term savings that could cause real harm.
‘And with Britain’s fiscal pressures more likely to intensify rather than fade away, continuing to rule out tax rises is going to make future Budgets even more challenging to deliver.’
Internet link: Resolution Foundation website
Act now to boost your state pension, warn tax experts
People should check their National Insurance contributions (NICs) record to see if they can boost their state pension entitlement before 5 April 2025, warns the Low Incomes Tax Reform Group (LITRG).
For a limited time, certain people are able to make voluntary contributions to cover any gaps in their NICs record dating back as far as the 2006/07 tax year, potentially boosting entitlement to the new state pension.
This applies to people who have already retired and are claiming the new state pension, as well as those who have not yet reached state pension age.
However, the extended window to make voluntary contributions for years from 2006/07 to 2018/19 will end on 5 April 2025, following which the window will revert to the usual six tax years.
Antonia Stokes, LITRG Interim Senior Manager, said:
‘If you have gaps in your National Insurance record, it can potentially make a big difference to the amount of state pension you receive now or in the future.
‘The deadline to make voluntary contributions dating back to 2006/07 will end in a few weeks’ time, so it is time to act if you want to take advantage of this.
‘The easiest way to find out if you have a gap in your National Insurance record and how much it might cost to plug it, is to check your online tax account on GOV.UK or contact the DWP.’
Internet link: Chartered Institute of Taxation website
Chancellor unveils plan to cut red tape
Chancellor Rachel Reeves has unveiled plans to cut red tape as the government aims to kickstart economic growth.
The government says its Action Plan will save businesses across the country billions of pounds by cutting the number of regulators, streamlining their core legal duties and cracking down on complexity in the regulatory system.
It says regulators have signed up to 60 growth boosting measures, including fast-tracking new medicines to market through a new pilot to provide parallel authorisations from key healthcare regulators, so that patients can access the medicine they need quicker
Other measures will aim to boost infrastructure building by simplifying guidance to protect bat habitats and streamlining mortgage lending rules, including making it easier to re-mortgage with a new lender and reduce mortgage terms.
The UK’s business groups welcomed the announcement.
Dr. Roger Barker, Director of Policy at the Institute of Directors (IoD), said:
‘The Government’s Better Regulation Action Plan is a welcome shift to a more growth friendly approach.
‘In addition to the measures announced today, we would also like to see the government apply more rigorous and timely impact assessment procedures when considering new regulation. Non-regulatory solutions should always be considered, and the business case for new regulation should be subject to proper independent scrutiny by the Regulatory Policy Committee. There should also be a commitment to reviewing the ongoing effectiveness of existing regulation at regular intervals.’
Kate Nicholls, Chief Executive of UKHospitality, said:
‘A plan to cut red tape and reduce the burden on businesses is long overdue.
‘In sectors like hospitality, businesses have been struggling with too much cost and too many regulations for decades, and it has held back growth.’
Internet link: GOV.UK | IoD website | UKHospitality website
