Spring Forecast 2026 Predictions: no Easter Bunnies from the Chancellor’s hat!

It might be tempting, ahead of next May’s council elections for the government to make some kind of ‘feel-good’ tax announcement. However, can we anticipate anything of the kind?

The Office for Budget responsibility will publish its Spring Forecast on Tuesday 3 March 2026 together with an updated Economic and Fiscal Outlook. The Chancellor, Rachel Reeves will then respond with a statement to the House of Commons.

Given that she confirmed in 2024 that the government planned to have one major fiscal event a year, so as to give “families and business due notice of tax and spending changes.” We should not be prepared for any major policy announcements. The government is also still trying to drive down its own debt levels and therefore it seems unlikely for any ‘Easter Bunnies’ being pulled out of the Chancellor’s hat.

However, despite the good intention, we have seen that the government is prepared to announce changes to some of the policies as previously announced between budgets. For example, we had a reversal of a plan to restrict the winter fuel allowance, almost as soon as it was announced in 2024. A wider policy change was the decision, announced in December 2025, to increase the allowance for Inheritance Tax (IHT) Agricultural property relief (APR) and Business property relief (BPR) of the £1 million to £2.5 million, and then to concede to allow the transfer of unused APR and BPR to spouses.

There are several burning issues which could do with being addressed before the next Autumn’s budget. Top topics for the Chancellor 2026 include:

Parliament’s Business and Trade Committee (BTC) published a report in February 2026 making key recommendations in order to cut the cost of small business tax compliance. The Chancellor could now take steps to review and explore some of all their suggestions by making ‘calls for evidence’ between March and parliament’s summer recess on the various topics featured in that report which include calls for major reforms on Employment Status and Business Rates.

On Employment status and employment rights: the BTD suggests that government should fulfil its commitments to conduct a review of employee, worker and self-employed status immediately. The problem is that only employees have full rights. However, from a tax perspective, some workers who are self employed are treated as employed and yet still do not obtain full employment rights. This creates a tension between employment rights and tax and it creates a regulatory minefield for employers and workers alike.

Business rates will increase as new rateable values take effect on 1 April 2026. As changes to rates multiplier will disproportionately affect Public Houses and Restaurants a 15% discount was announced in December 2025. Given the impacts for businesses, it may be possible that further concessions will be announced. The BTC make the case for an ambitious reform of business rates instead. Leading economists recommend reform of council tax too. In the case of business rates, reform could be in the form of a turnover-based local tax and online sales tax. For council tax, revaluation is a preferred option.

The student loan problem: amid growing concerns about high interest charges and the freezing of repayment on Plan 2 Student Loans, the government may wish to heed the advice of Money Saving Expert, Martin Lewis, who says that “Plan 2 Student loans work more like a tax than a loan”. What seem like very unfair credit terms for these loans has a knock-on impact on the labour market. That’s something which may stir the Chancellor to take action, particularly when the other political parties are now voicing their solutions which include freezing interest and reducing the rate charged. Thousands of graduates face an effective 9% ‘tax charge’, according to Martin Lewis. There is growing evidence that some students are reducing their working hours to avoid repayment of loans that due to high interest rates may never be repaid.

The high cost of employment: although increasing the rate of National Minimum Wage (NMW) was a Labour government manifesto promise, there is a problem in a lack of affordability for employers, especially when combined with increases to employer NICs. The effect is to create a disincentive to take on young workers. With an estimated 1 in 6 18 to 24 year-olds out of work this is a cause of grave concern for ministers.

Finance Bill 2025-26 is passing through parliament and changes to its measures now seem unlikely.

For tax advisers, who interact with HMRC, the bill contains some controversial legislation in respect of a new requirement for tax adviser registration. A notable problem is that the legislation has been widely drafted and lacks clarity, especially when it comes to creating safeguards. This impending disaster is despite the efforts of the various tax and accountancy bodies to table changes to the draft legislation. Instead, the minister has provided assurance that advisers can rely on Hansard (the record of what is said in parliamentary debate) instead of relying on clear legislation. The effects of this curious outcome will not be known until the legislation (and thus parliament’s intentions for it) are tested by the courts and tribunals on appeal. HMRC is publishing guidance, this may well evolve over time.

Help your clients stay informed with our Spring Forecast 2026 newsletter, a personalised PDF covering the announcements that matter most to them.