After declaring its commitment to one single fiscal event a year, the Government’s Spring Statement 2026 was more of an update on the state of the economy than anything else. The headline? Inflation is falling, which the Chancellor used as an opportunity to reassure businesses with lower capital costs and greater certainty.
However, while GDP is forecast to grow – 1.1% in 2026, 1.6% in 2027/28, and 1.5% in 2029/30 – it’s a relatively small increase, and further tax rises are predicted for October. Meanwhile, the Chancellor spoke of moves to break down trade barriers with Europe, go further to back innovation, and leverage the power of AI to help talent thrive in Britain.
But what does the current state of play really mean for small businesses?
Is no news good news?
While the lack of any new announcements is good for stability, many businesses feel it’s a missed opportunity to give further support to those that are struggling in the form of a reduction in employment costs and business rates. While a Pubs and Live Music Venues Relief was announced in January 2026, due to come into effect in April, other industries feel like more could have been done – especially in a relatively low growth environment where geopolitical volatility can bring added pressure to the economy.
All in all, costs are still going up for small business owners. And with no drastic changes made in the Spring Statement, now is the right time to get your financial ducks in a row. Here’s a handful of key areas for you to focus on for the immediate future.
National Minimum Wage (NMW)
The NMW for workers aged 21 and over will rise by 4.1% from April 2026, equating to an increase of around £900 a year for a full-time employee on that rate. Similar percentage increases apply for 18-20 and 16-17 age groups. Protect your cash flow by preparing for the rise in your wages costs.
Apprenticeships
From April 2026, the cost of training under-25 apprentices will be made completely free for SMEs, with additional investment incoming. If the NMW increases are causing recruitment headaches for your bottom line, then taking advantage of the reformed apprenticeship scheme could prove a cost-effective strategy.
Frozen tax rates
The freezing of income tax thresholds in England, Wales and Northern Ireland has been extended to April 2031. This means more of your income is subject to tax as inflation increases. Gifting some of your income-producing assets to your spouse or civil partner could offer some tax relief during this time, but it all depends on your circumstances and you should always seek professional advice first.
Business asset disposal relief
From April 2026, there will be an increase in the rate of tax on the sale of your business and business assets to 18%. If you’re considering selling, getting professional and proactive tax-planning advice could save you a considerable amount of money.
Dividend income tax rates
From April 2026, the basic and higher dividend tax rates will increase by 2%. This means higher bills for business owners whose income is made up of dividends. We suggest reviewing your remuneration strategy with a professional to ensure that the way you extract your profits is the most efficient one for your unique circumstances.
Seek professional advice to manage economic challenges
Rising costs and unpredictable external shocks to the economy make running a small business challenging. But by taking a holistic view of your current financial strategy, you could find new efficiencies and make money-saving changes that not only protect your business through uncertainty, but grow it.
At Nabarro Poole, we specialise in helping small business owners bring those cost-efficiencies into focus and get their organisation operating more closely in line with their goals. Get in touch with our friendly team today to find out more about how we can help.
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