Spring Statement 2025 Commentary: Technology

As predicted, there were no major announcements relating to tax rules, with the government committing to one major fiscal event per year, in the autumn. Sadly for tech businesses, there was no u-turn on the NICs rate or threshold changes. This means that the secondary threshold will be reduced to £5,000 as of 6 April 2025, bringing more employee wages into the scope of employer NICs, and the rate at which employers pay NICs is increasing from 13.8% to 15%. This will be unwelcome news for those in the tech sector particularly in the start-up and growth phases where margins could be significantly impacted and hiring and remuneration policies may need to be reconsidered.

The government is committed to driving economic growth, and the Chancellor recognised in the spring statement that global uncertainties have impacted growth in Britain and with our trading partners. To support growth, the Chancellor announced spending in areas such as defence, public services, and capital infrastructure and the construction industry. This is disappointing for the tech sector, as there were no real announcements for any further investment into the sector, or any more information on the digital transformation roadmap.

The biggest investment into technology will be for public services, with a £3.25 billion Transformation Fund. This however is to drive efficiencies across government, supporting the reform of public services by introducing more digital technology and AI, with the first investments being directed towards the children’s social care system and probation officers, and large investments into defence. This left little room for any additional investments into the technology sector, although the commitment to ensure that 1 in 10 civil servants will be a ‘digital professional’ by 2030 demonstrates the government’s embracing of the power of digital technology.

The statement announced a number of consultations. One consultation has been launched to consider advance clearance for R&D tax credits, which would be a new process for R&D, and could help provide welcome certainty in the face of the recent aggressive stance HMRC have taken against R&D claims.

Some more optimistic news for tech companies seeking investment is that the government has reiterated its determination to ensure the UK is an attractive place to start and scale-up a business. Whilst there is no consultation, it has been announced that the government will hold a series of roundtables with leading entrepreneurs and venture capital firms in April to discuss the role of tax reliefs such as EMI share incentives, and EIS and VCT investment schemes. Many tech companies will rely on these tax reliefs especially in the very early stages of building a business and we hope that this means such reliefs will be maintained or strengthened, and are not in danger of being slashed in the coming years.