Spring Statement 2025: RCK Summary

The Spring Statement focused on tracking progress against the plans set out in the Autumn Budget and summarising new measures announced since then. Below, we highlight the key updates relevant to our network's interests.

1) Increases in Defence Spending

Following the UK government's February announcement of increased defence spending amid emerging threats and opportunities for UK security, Reeves reaffirmed her commitment to providing an additional £2.2 billion in funding for the Ministry of Defence next year. This marks a commitment to increase NATO-qualifying defence spending to 2.5% of GDP by 2027. While the long-term goal was previously established, this update provided clarity on the short-term strategy to achieve it.

The plan involves areas like Glasgow, Derby, and Newport seeing advanced manufacturing production with new business opportunities and creating an increase in demand for skilled jobs. Additionally, in Barrow, where the UK's nuclear submarines are maintained, further investment was announced which will also lead to local job creation. Reeves pledged that at least 10% of the Ministry of Defence’s equipment budget will be allocated to emerging technologies, including AI-enabled systems and drones.  

This recommitment to innovation in defence is particularly timely for our clients as we welcomed Andrew Carwardine as our Senior Defence Partner earlier this week. With nearly four decades of experience, including roles as a British Army Officer and as an Advisor to the Ministry of Defence, Carwardine’s appointment underscores RCK’s commitment to advancing the UK defence sector at a time when rapid innovation is critical. As Reeves noted, "We have to act quickly in a changing world." This investment is expected to bolster national security while fostering economic growth through R&D and innovation under the upcoming Strategic Defence Review and Defence Industrial Strategy.
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2) R&D Tax Relief‍

R&D reliefs advance clearances consultation
Although not mentioned during the live address, the accompanying Spring Statement 2025 document highlighted an open consultation on advance clearances for R&D tax relief. For background, advance assurances were introduced in 2015 to bring certainty for companies that are new claimants and have 50 or fewer employees. However, it has been hindered by delays and issues, so is not widely utilised.

Through the Consultation, the Government is considering who may be eligible for a new clearances scheme, who may be required to use it, where in the claims process the scheme could be implemented, and the role of agents.

RCK's R&D Technical Director, Peter Clark, comments:

“An advanced clearance approach allows HMRC to review claims before payment, providing an opportunity to enhance accuracy and reduce fraud within the scheme. Expanding this process will foster greater confidence in the system. However, HMRC themselves acknowledge the challenge of rolling this out to a large proportion of potential claimants due to resource constraints.

As a result, the consultation explores various approaches that HMRC may pursue in implementing a clearance scheme that reaches the greatest number of customers that should engage in clearance (i.e. those most at risk of submitting erroneous claims). I see the consultation on some form of clearance for R&D claims as a positive step, provided the following outcomes are met:  

· The customer experience is not adversely affected by way of significantly reduced processing times or engaging with non-technically trained Inspectors.

· Payments not being reclaimed, which is a current major issue that advance clearance should resolve if implemented properly.

Within the scope of the consultation, HMRC are proposing three clearance models— pre-activity, pre-claim, and pre-payment reviews,- each offering distinct benefits and serving to address different problems.

Given the complexity of governing the scheme effectively, a combination of these approaches is likely to offer the best solution. It will likely be a compromise between the resources available, and the gains that can be achieved by focusing on certain segments of customers. Through the introduction of the Additional Information Form (AIF), HMRC now has access to large amounts of claimant data. This puts them in a strong position to develop a scheme that achieves the desired aim of providing increased value for money for the taxpayer.”  

HMRC Compliance‍

The Government has reaffirmed its commitment of £100 million to bolster HMRC's compliance capabilities, funding the recruitment of 500 additional compliance staff. This was first announced in the previous Autumn Statement and aims to enhance HMRC’s ability to enforce tax legislation and to take swift action against tax advisers facilitating non-compliance. These measures are welcome news for processing times and the speed of enquiry resolution.

3) Property Tax‍

Business Rates Reform

In the latest Autumn Budget, a commitment was set out to reform the business rates system to support the UK’s high streets and to encourage investment. The Spring Statement document promises an interim report to lay the groundwork and outline reform plans, leading up to key policy announcements in the next Autumn Budget. Commenting on this, Bradley Westlake, Head of Business Rates - Surveying, stated, “This reform is welcome and is overdue. A fairer system is needed regarding business rates to facilitate businesses to thrive and stimulate economic growth.”

Housing Planning Reforms

Reeves emphasised that the current planning system is "far too slow," a challenge the government aims to address through major reforms. The Office for Budget Responsibility (OBR) projects these changes could elevate housebuilding to a 40-year high, enabling the construction of over 1.3 million homes across the UK within the next five years. To support this ambitious growth, the government is prioritising workforce development, with the Education Secretary announcing an investment of over £600 million to train up to 60,000 new construction workers. This initiative includes the launch of 10 new Technical Excellence Colleges across the country, ensuring a skilled workforce is available to meet the housing sector's rising demand.
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If you have any queries regarding any of our service lines please do not hesitate to get in touch, to discuss your specific circumstances with our tax specialists. 

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