Spring Statement comments – Dow Schofield Watts

Roger Esler, partner in the corporate finance team at Dow Schofield Watts: 

“The Statement contained much talk of growth and investment but was remarkably thin on detail on areas of much needed expenditure savings.

“Government expenditure and tax rises evidently intertwine with economic growth and have complex and wide-ranging ramifications. To enhance the growth outlook, we need to see expedient promised investment in areas such as defence, housing, (effective) energy and infrastructure, as well as moderating the medium-term tax burden outlook with a more radical, long-term approach to public sector spending where it is evidently wasteful.

“Despite the current stodgy economic conditions, businesses are proving resilient and focussed on what is in front of them – perhaps more so for mid-sized businesses than giant multinationals – and pursuing growth strategies or realisation routes whilst capital gains tax rates still offer some encouragement to wealth creation. It’s a shame that so many other available levers to incentivise entrepreneurialism are not being deployed or being pulled the wrong way.”

Shenal Wijetunge, partner in the tax advisory team at Dow Schofield Watts

“The Chancellor’s Spring Statement signals a clear focus on fiscal responsibility, with no new tax increases and a strong message on ensuring everyone pays their fair share. The use of advanced technology by HMRC to tackle tax avoidance is welcome, but this must be implemented proportionately to avoid undue pressure on compliant businesses, particularly SMEs already navigating complex tax legislation.

“The commitment to raise defence spending to 2.5% of GDP could present a real opportunity for innovation. This could stimulate R&D across advanced manufacturing, materials science, and emerging technologies especially if regional businesses are encouraged to contribute to the UK’s defence capabilities through targeted innovation. Unlocking this potential will require aligning industrial strategy with tax incentives to ensure R&D activity is supported, scaled, and retained in the UK.

“However, the Statement was light on specific support for innovative businesses. With the UK competing globally for R&D investment, we need a clearer, more stable framework for innovation. If the UK is serious about becoming a science and technology superpower, future fiscal events must prioritise not only stability but significant growth too.”