Will Spring Statement 2025 be taxing for tech job board users?

There are three likely Spring Statement 2025 proposals we think job board users, due to how they structure themselves for a temporary or full-time job posting, should look out for next Wednesday as they may be taxing, writes Lisa Somerton, a manager at Jenner &Co.

Artificial Intelligence: a Spring Statement then and now

Before we share the trio, a word about Artificial Intelligence (AI).

The last Spring Statement was heavy on AI.

And that focus from a UK chancellor on the nascent technology won an understandable cheer from technology sector advocates.

But at the next fiscal statement on Wednesday March 26th, we’re very likely to hear how digitisation, including AI, is going to raise a hefty £45billion a year in productivity and efficiency savings.

AI to cut public sector spending, by billions

The figure stems from a review by Peter Kyle, the science and technology secretary, who reportedly claims AI can shave between four and seven per cent off public sector expenditure.

It’s hard to imagine IT job board users protesting at this tech-enabled saving which, as we say, Spring Statement is likely to at least nod to, invariably in the chancellor’s speech on Wednesday afternoon in the House of Commons.

Public sector: Are you a contractor doing ‘basic tech tasks?’

But be aware if you’re a contractor.

It appears that some AI will be used to pare back the £14.5 billion currently spent on contractors and other consultants who complete what the government has described as “basic technological tasks.”

In addition, to this cutback, compulsion is also on the cards for some external contractors supplying non-commercial clients.

‘Contemplation Clauses’ to force contractors to AI assess and adopt

In fact, also incoming across the public sector are new “contemplation clauses” on government contracts, to require contract suppliers to regularly “assess and adopt” AI if they work on a public sector assignment.

In what we specialise in -- tax and accounting -- there are three other proposals we expect to see in Rachel Reeves’ second fiscal statement.

It should be noted that the government has previously committed to one fiscal event per year (a budget in the Autumn), so as to give individuals and businesses greater certainty over tax changes.

From 2025, Spring Forecast is the new name for Spring Statement

Labour is even trying to encourage us all to call Wednesday’s statement by the chancellor ‘Spring Forecast 2025,’ not ‘Spring Statement 2025,’ simply to make it sound less of a fiscal event.

However, the pressure has been on chancellor Reeves since Autumn Budget 2024 in October 2024, to re-think some of the measures which were deployed to hit taxpayers, and hard, from April 6th 2025.

Three Spring Statement 2025 announcements job board users must look out for on March 26th

1. Employer NICs; will you owe HMRC more from early next month?

One of the most controversial reforms announced at last year’s Autumn Budget (Reeves’s first fiscal statement as Labour chancellor) related to Employer’s National Insurance.

Affecting both the threshold at which Employer NICs fall due and the rate which is payable to HMRC, these changes are set to take effect from new tax year 2025-26, which starts on April 6th 2025.

Employer NICs changes: at-a-glance

Job board users who undertake temporary contracts and operate through an umbrella company or their own limited company, will be adversely affected by these changes in take-home pay terms.

The changes to Employer’s National Insurance are two-fold.

• From April 6th 2025, the rate of Employer’s National Insurance will increase from 13.8% to 15%;

• From April 6th 2025, the threshold at which this charge -- ER NICs -- becomes payable to HMRC drops, from £9,100 to £5,000. 

A total Spring Statement U-turn on ER NICs is an outside bet

There has been widespread concern over the upcoming rate increase, and pressure on Reeves to backtrack on this proposal. 

The changes are unlikely to be completely cancelled next week, when the chancellor gets to her feet.

But perhaps the new rate of ER NI from April (15%) might be eased by the chancellor increasing the proposed starting threshold of £5,000. 

Will £6,500 be the new employers' national insurance threshold?

Even just a small increase in this threshold, such as increasing it up to the lower earnings limit of £6,500 for Employee National Insurance, would allow job board users who direct their own limited company to take a salary that keeps their state pension record up-to-date without the hassle of monthly payments of employer’s national insurance.

A real rabbit out of the chancellor’s hat…

For job board users who work through an umbrella company, the planned rise in Employer’s National Insurance is likely to be passed on to them -- the worker.

So any increase in the proposed £5k starting threshold would really represent a rabbit out of the hat from the chancellor, as it would help ease the adverse impact on umbrella worker take-home pay.

2. Will umbrella companies that job board users use really be regulated against?

Contractors should on Wednesday look out too for further details on the proposals relating to umbrella company regulation.

These proposals are currently due to become law from April 2026 – a commencement date that the government confirmed on March 4th 2025.

Umbrella regulation recap

For the uninitiated, October’s Autumn Budget announced a commitment by Labour to regulate umbrella companies, by introducing the transfer of the responsibility for PAYE payments from the umbrella company to the recruitment agency (or to the end-user where there is no recruitment agency). 

The practical implications of this umbrella regulation plan -- known as the ‘deemed employer’ proposal -- are still far from clear, so additional clarification at Spring Statement 2025 would be welcome. 

‘Deemed employer’ understanding needs time to develop

Any tightening up of umbrella company compliance is to be supported.

But umbrella companies -- which job board users tend to use on temporary contracts when a limited company is not used or permitted -- need the chance to develop an understanding of the regulations.

The more in advance this understanding is developed, the less likely there will be any negative impact on labour market stability.

3.  Fiscal drag (drags on), or will Spring Statement 2025 mitigate stealth tax?

The third point for both contractors and full-time job applicants to be on guard for next Wednesday is the freezing of tax thresholds, which are currently set to be frozen until April 2028.

And extending that freeze beyond the next three years would hurt!

Known as a ‘stealth tax,’ the effect of this freezing of tax thresholds is that taxpayers are dragged into higher tax brackets, as wages rise with inflation. It’s known as ‘fiscal drag.’

As said at the top, the government has been keen to state that the Spring Statement -- sorry Spring Forecast -- will not be a major tax event.

That means, theoretically, the March 26th package is more likely to contain spending cuts, not tax rises. However, the freezing of ‘tax-free’ thresholds beyond April 2028 is a measure that Reeves could resort to with the aim of tackling government borrowing costs.

TL:DR: Is Spring Statement 2025 a boon for job board users?

With a decline in economic growth since October’s Autumn Budget (including a worse-than-expected 0.1% contraction in Jan 2025), the chancellor has a difficult decision over the trade-off between tax increases and spending cuts. 

An outright U-turn on Reeves’ so far most controversial proposal -- higher Employer’s National Insurance -- is unlikely on March 26th, but perhaps modifying the hefty 45% increase in the ER NI threshold is the answer.

Due to the effect that the proposed National Insurance changes will have when job board users use an umbrella or limited company to carry out an assignment, setting the ER NI threshold at £6,500 would indicate to workers in the tech industry (and beyond) that the chancellor is listening. To boost economic confidence and the tech labour market, increasing the threshold, by just a tad, may matter more at Spring Statement 2025 than even another shot in the arm for AI.