Rachel Reeves’ second Spring Statement, due on 3 March 2026, is likely to be a key moment for business owners watching tax, pensions and employment costs very closely. Recent U‑turns on inheritance tax reliefs and business rates suggest that the so‑called ‘Iron Chancellor’ may be more willing to bend than her nickname implies.

When is the Spring Statement 2026?

The Chancellor has asked the Office for Budget Responsibility (OBR) to produce an updated economic and fiscal forecast for Tuesday 3 March 2026, and she will respond to that forecast in a statement to Parliament the same day. 

The Spring Statement is not a full Budget, but it is increasingly used to give an update on the state of the economy and to launch consultations or signal future tax changes that can have a real impact on planning.

The ‘Iron Chancellor’ – but how rigid?

Rachel Reeves has embraced the ‘Iron Chancellor’ label, stressing her determination to take difficult decisions to keep the public finances on a ‘firm footing’. At the same time though, she has faced sustained criticism from business groups over measures such as the increase in employer National Insurance contributions (NICs) and the planned restriction of pension salary sacrifice, prompting questions over how far she will adjust course this spring.

Inheritance tax – a softer stance for farms and businesses

In December the government unexpectedly announced that the maximum value of assets qualifying for Agricultural Property Relief (APR) and Business Property Relief (BPR) before reduced relief rates apply will rise from £1 million to £2.5 million per person. For spouses and civil partners, that effectively allows up to £5 million of qualifying agricultural or business assets to be passed between them free of IHT, on top of existing allowances.

These changes rolled back part of the earlier reform package from the 2024 Autumn Budget, which had limited the highest rate of APR/BPR relief to the first £1 million of combined business and agricultural assets and caused significant concern among farming and business groups. 

Ministers have presented the new, higher thresholds as a response to feedback, arguing that they still prevent unlimited relief for very large estates while protecting more family farms and trading businesses.

Pubs and business rates – some relief, some frustration

The government has also indicated that it will reverse forthcoming business rates increases for pubs in England after sharp rises in rateable values and a scaling back of pandemic‑era discounts from 75% to 40% in the last Autumn Budget. 

Treasury officials have acknowledged the severe financial pressure facing many pubs, and the move follows strong lobbying, including some landlords barring Labour MPs in protest.

However, the extra help is targeted at pubs only, which has prompted retailers, hoteliers and other high‑street businesses to question why they will not receive the same level of support. With business rates set to rise sharply over the next three years as Covid‑era reliefs are unwound and property valuations are updated, many in the wider sector will be watching the Spring Statement closely for signs of a broader rethink.

Employer NICs – a ‘tax on jobs’?

In her first Budget, Ms Reeves announced that the main rate of employer NICs will rise by 1.2% to 15% from 6 April 2025, while the Secondary Threshold (the point at which employers start to pay NICs for each employee) will fall from £9,100 to £5,000 per year.

Business groups have described the combination of a higher rate and a much lower threshold as a ‘tax on jobs’, arguing that it discourages hiring and pushes up costs at a time when many firms are still rebuilding after the pandemic and dealing with inflationary pressures.

The British Chambers of Commerce and others have linked these NIC changes to falls in business confidence and warned that higher payroll costs will be passed on to consumers through higher prices. With estimates that significant numbers of jobs have already been lost since the policy was announced, and increasing unemployment figures, employers will be hoping that the Spring Statement at least offers some mitigation, such as adjustments to thresholds, sector‑specific support or a longer timetable.

Pension salary sacrifice – a future flashpoint

Another controversial measure, announced in the 2025 Budget, is the plan to charge both employer and employee NICs on pension contributions made via salary sacrifice above £2,000 per year from April 2029. At the moment, salary‑sacrificed pension contributions generally escape NICs altogether, making them an efficient way for both employers and employees to boost retirement saving, so the planned cap represents a significant change in the rules.

Analysis from firms such as Grant Thornton suggests that, based on current NIC rates, employees earning under £50,270 could face 8% NICs on salary‑sacrificed contributions above the £2,000 cap, while those earning more would pay 2% on the excess, with employers paying 15% NICs on those amounts. 

The Society of Pension Professionals has warned that the change is likely to increase costs for employers and employees, reduce pension saving and is poorly timed given government data indicating that there are already around 15 million people not saving enough for an adequate retirement.

What might we see this Spring?

The Spring Statement 2026 gives the Chancellor another opportunity to respond to the mounting concerns around employer NICs, business rates and pension salary sacrifice, as well as to signal any wider tax and spending priorities. Her recent willingness to revise the APR/BPR changes and to provide further support for pubs suggests that she is prepared to adjust policies where there is strong evidence of unintended consequences for jobs, investment and key sectors.

Owner‑managed businesses in particular should watch for any announcements that affect payroll costs, succession planning, property‑related taxes and longer‑term retirement strategy. Even if there are no immediate reversals, the Spring Statement is often used to launch consultations, which can be an early warning of future changes that are highly relevant to business planning.

What should business owners do now?

It’s important for business owners to keep these opportunities for announcements firmly on their radar and start modelling the impact on their own numbers as soon as the facts are available. Reviewing workforce plans, remuneration structures, pension arrangements and longer‑term succession or exit strategies as quickly as possible will make it easier to adapt quickly if the Chancellor bends again – or doubles down – on existing policies.

As always, we’ll be watching the Chancellor’s speech, and will send our summary out to clients and contacts as soon as possible afterwards. If you have any concerns in the meantime or afterwards, please get in touch.