What Rachel Reeves' Spring Statement Means for Small Business Owners Like Me

Rachel Reeves may hold the red folder, but it's small business owners feeling the weight of every pound and penny.

As a marketing consultant and small business owner, I always keep one eye on the economy and the other on how government decisions ripple through the lives of people like us, the ones managing budgets, trying to stay agile, and wearing too many hats at once.

The Spring Statement by Chancellor Rachel Reeves was always going to be a pivotal moment. With whispers of revised growth forecasts and rising borrowing costs already in the air, many of us tuned in wondering how much harder we’d be squeezed and where we could still find room to breathe.

A Statement of Strain, Not Strength

What struck me immediately was the undercurrent of pressure on the government, yes, but more so on the private sector. Businesses are, once again, being called upon to bear the weight of economic recovery. Reeves’ focus on fiscal responsibility, while understandable, comes with an unspoken caveat: brace yourself.

Talks of curbing inflation and stabilising public spending are welcome on paper. But in practice? It often translates into increased employment costs, regulatory tightening, and a demand on SMEs to do more with less. I couldn’t help but feel a familiar pit in my stomach, one I think many small business owners will recognise.

Key Points from Rachel Reeves' Spring Statement Affecting Small Businesses

As a small business owner, it's crucial to understand the specific measures announced in Chancellor Rachel Reeves' Spring Statement that may impact your operations:

1. Increase in Employer National Insurance Contributions (NICs):

   
   

   • Effective from 6 April 2025, employer NICs will rise from 13.8% to 15%, and the threshold for these contributions will decrease from £9,100 to £5,000. This change is expected to generate an additional £25 billion for public services. ​Sage 200 ERP Services+10The Guardian+10The Sun+10
     

2. Rise in National Living Wage:
   

   • Starting 1 April 2025, the National Living Wage will increase by 6.7% to £12.21 per hour. For a full-time worker, this equates to an annual pay rise of approximately £1,400. ​The Scottish Sun+1Wikipedia+1
     

3. Adjustments to Employment Allowance:
   

   • The Employment Allowance will increase from £5,000 to £10,500, allowing eligible businesses to reduce their NICs liability. ​Business Helpline+4LinkedIn+4Wikipedia+4
     

4. Implementation of Making Tax Digital (MTD):
   

   • MTD for Income Tax Self Assessment will become mandatory for sole traders and landlords with qualifying income over £20,000 from April 2028. ​Company Formation and Registration UK+2LinkedIn+2Sage 200 ERP Services+2
     

5. Capital Gains Tax (CGT) Adjustments:
   

   • The CGT rate on the sale of shares will increase from 20% to 24%, unless the sale qualifies for Business Asset Disposal Relief. ​The Guardian+3Company Formation and Registration UK+3Sage 200 ERP Services+3
     

6. Sector-Specific Investments:
   

   • An additional £13 billion will be invested in capital infrastructure over the next five years, including a £625 million construction skills package aimed at training up to 60,000 more skilled workers. ​LinkedIn
     

Understanding these changes is vital for strategic planning and maintaining the financial health of your business. If you're considering adjustments to your budget, particularly in areas like marketing, exploring outsourcing options could provide flexibility and cost savings during these transitional periods.

The Real Cost of Stability

We’re told stability is the goal but the road to get there feels unstable at best. Rising minimum wage, adjustments to National Insurance, and the looming pressure to retain staff in a tight labour market means that, as a business owner, every decision feels heavier.

For those of us in service industries especially marketing, design, digital and more, it becomes a balancing act between staying visible and staying afloat. The temptation, understandably, is to slash the marketing budget first.

But here’s where I want to offer a different perspective and of course plug ...

Cutting Marketing? Consider This First.

In tough times, marketing often becomes the first casualty. But visibility and trust are hard-won and once lost, they take ten times more effort to rebuild.

If you’re feeling the pressure from rising employment costs and thinking about reducing your marketing team or scaling back campaigns, I get it. I've been there. But instead of cutting marketing altogether, there’s another option worth considering: outsourcing.

Whether it’s hiring a freelance marketing consultant (like myself) or working with a small, agile agency, outsourcing allows you to keep your marketing engine running without the overheads of full-time staff. You still show up online. You still attract leads. And you do it in a way that’s leaner, more efficient, and adaptable.

I’ve helped clients navigate moments like this businesses who wanted to pause their marketing but instead pivoted to a smarter model. And more often than not, they came out stronger.

Rachel Reeves Spring Statement In Summary

Rachel Reeves’ Spring Statement might not have delivered a knockout blow, but it’s a wake-up call. The message is clear: costs are rising, and we need to plan accordingly.

So if you’re a business owner weighing up where to trim the fat, let’s have a chat. Outsourcing your marketing could give you breathing room while still keeping your brand alive and well. In this economy, that kind of balance isn’t just smart, it’s essential.

Book a free consultation if you’d like to explore how outsourcing can work for you.