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The UK Spring Statement will take place on Tuesday 3 March 2026. What could be announced?
02 March 2026
The UK Spring Statement 2026 will take place on Tuesday 3 March 2026. We already know from the Autumn Budget that taxes are rising by stealth and on wealth. What we don't have details of yet is an economic growth plan and how the Chancellor will alleviate the costs of living and business costs.
Could more tax rises be on the way, or will the spring fiscal event be a low key affair (ahead of the May local elections} as the current Chancellor appears to be suggesting, or will she use the event to clarify the direction of government fiscal policy? Last year’s Spring Statement included tax rises to provide the Chancellor with additional fiscal headroom.
The current political situation in 10 and 11 Downing Street suggests there may be more tax changes on the way, if not now maybe later in the year, if the current Prime Minister and Chancellor, whose positions look unsecure, are persuaded to pursue a path of more public spending and borrowing, requiring further tax rises. Economic growth at the moment is not sufficient to pay the way, but maybe the Chancellor will set out how growth is to be boosted.
The Chancellor is under pressure to spend more on defence and welfare. The Prime Minister has previously announced his ambition to raise spending on defence to 3% of GDP in this parliament and ongoing geopolitical issues may strengthen his resolve.
There is also the imminent abolition of the two-child benefits cap and the effect this will have on the welfare bill.
Even if current tax receipts look healthy from the usual January self-assessment receipts (and one-off CGT on asset sales prior to rate increases), this will soon be used up. In addition, spending on school children with special educational needs and disabilities (Send) could reach nearly £13bn a year in three years time.
It is not inconceivable that there may be a mini Budget before the autumn if the Spring Statement is a non-event and fiscal policy needs to be reset before the autumn to provide reassurance to the bond markets that the government's borrowing and spending is credible. We have already seen volatility in the markets from recent events, and having to wait until the Autumn Budget in October or November may be too long to wait for any corrective action.
This Spring Statement, we are told, will not be a full Budget, as the Chancellor has said. However, experience shows that even supposedly low key fiscal events can contain meaningful tax and spending announcements.
| Inflation | 3% and falling towards the 2% target this summer. (It was at 2% when Reeves became Chancellor, and food prices still rising: by up to 3.6%). But with plans to raise fuel duty later this year for the first time in 15 years will impact inflation, individuals and businesses. |
| Interest rate | 3.75% and likely to fall further (although still the highest rate in the G7) |
| Unemployment | 5.2% and rising (and even higher for younger people), and job vacancies falling to their lowest level since 2021. |
| Growth | 0.1% (2025 Q3 and Q4) and remaining low |
- The Chancellor faces limited fiscal headroom despite easing inflation and Jan tax receipts
- Frozen tax thresholds continue to drive significant stealth taxation
- Inheritance tax and business property relief remain under close review
- Major tax rate changes are unlikely, but targeted reforms are possible
- Business rates reform and cost‑of‑living support may feature
- Forward planning remains essential for businesses and private wealth
- National Minimum Wage rises in April affecting youth employment
- New Employment Rights Act also having an impact on recruitment
As the Chancellor prepares for the Spring Statement, the UK economy remains fragile.
Inflation has fallen sharply from recent highs, yet prices remain elevated for households and employers alike, particularly energy prices. Interest rates have eased but continue to dampen consumer confidence and capital investment. Economic growth remains subdued, with productivity improvement proving stubbornly difficult to achieve.
In addition, the UK is being hit by US tariffs affecting exporters to the US, particularly those in the food and drink sector.
Meanwhile, structural pressures on the public finances persist:
Against this backdrop, Rachel Reeves has reaffirmed her commitment to fiscal discipline, maintaining that the Government will deliver only one major fiscal event each year. However, this does not preclude the Spring Statement being used to refine policy and raise revenue in less visible ways, or indeed a mini Budget sometime in the summer if deemed necessary.
The House of Commons Library has published a background paper to the Spring Statement.
One of the most significant drivers of additional tax revenue remains the prolonged freezing of tax thresholds.
The personal allowance has been fixed at £12,570, alongside frozen higher‑rate thresholds. These freezes are currently scheduled to remain in place until at least April 2031, although a general election before then could result in a change of policy.
The impact of fiscal drag has been substantial:
According to the Office for Budget Responsibility, frozen thresholds represent one of the largest tax‑raising measures in modern UK history, achieved without increasing headline tax rates.
Another issue is student loans and the freezing of repayment thresholds. It is understood that there may be an announcement on easing the burden of student loan repayments on graduates who face high interest charges on their debt.
Any reversal of threshold freezes appears unlikely. However, political pressure is building to provide targeted support for households most affected.
Possible Spring Statement measures, although unlikely, could include:
Such measures provide visible cost‑of‑living support while limiting the long‑term impact on the public finances.
The interaction between the state pension triple lock and frozen allowances has brought many pensioners into income tax for the first time.
Potential responses may include:
Even modest adjustments could significantly reduce unintended tax exposure.
Inheritance tax (IHT) remains one of the most politically sensitive, and fiscally attractive, areas of the tax system.
Frozen nil‑rate bands combined with rising asset values mean more estates fall within scope each year. IHT receipts continue to increase, despite the tax affecting a relatively small proportion of families.
Possible Spring Statement signals may include:
Language around “fairness”, “modernisation” or “simplification” often precedes structural change. Business owners and families with succession plans need to monitor developments closely. Many will already have plans in place based on previous Autumn Budget announcements.
The previous Autumn Budgets prioritised predictability, confirming:
This framework is expected to remain intact. However, the Spring Statement may introduce incremental adjustments.
Areas to watch include:
The overall direction of travel suggests fewer generous reliefs and increased scrutiny rather than overt tax rises.
Business rates remain a significant concern, particularly for retail, hospitality and manufacturing sectors, despite a recent U-Turn on the full impact of proposed measures.
While comprehensive reform has repeatedly been delayed, Spring Statement 2026 announcements could include:
Any movement in this area would be welcomed by businesses facing sustained cost pressures, and particularly pubs.
With limited fiscal headroom available, large‑scale spending commitments appear unlikely, other than for welfare and the NHS.
However, the Statement may reaffirm investment priorities such as:
The emphasis is expected to remain on attracting private investment, rather than just expanding public sector spending.
The central theme ahead of the Spring Statement 2026 is continuity rather than transformation.
Yet continuity still delivers impact. Tax policy continues to evolve through:
For businesses and individuals with significant wealth, proactive planning remains critical, particularly around:
Even limited Spring Statement measures can materially affect outcomes when layered onto existing policy.
Although the Government remains committed to a single annual Budget, the UK Spring Statement 2026 should not be overlooked.
In an environment of constrained public finances and rising political pressure, the likelihood of stealth taxation and targeted reform remains high.
Bishop Fleming will be monitoring the Spring Statement closely and will provide analysis of the announcements and their implications for businesses and private clients.
Looking further ahead, could the Chancellor be considering a more radical path along the lines of Angela Rayner's previously leaked document, which suggested an extra £4bn a year in tax rises? How many of her ideas could the Chancellor take on board? Those ideas included:
Some of her ideas have already been adopted, such as freezing personal tax allowances beyond 2028.
In view of the above, there are some actions you could take before the Statement, or at least before 6 April, including:
Using your annual allowances, such as your ISA allowance, your Capital Gains Tax allowance and your annual pension contribution allowance. You could also consider gifting assets to save Inheritance Tax, setting up trusts and taking out whole of life insurance.
However, before deciding what actions to take, you should seek advice to ensure you maximise any opportunities in the best way possible before they disappear.
If you would like to discuss how these forthcoming changes could impact you and your business, please contact your usual Bishop Fleming advisor or send us your enquiry today.
[Gary Mackley-Smith]
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