Andrea Reynolds’s expert insights into the Spring 2025 Budget statement

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    Page written by Ian Hawkins. Last reviewed on April 2, 2025. Next review due April 6, 2026.

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        On 25 March 2025, Chancellor Rachel Reeves delivered her latest Budget Statement. Andrea Reynolds, CEO and Co-Founder at Swoop, gave her reaction to the latest developments. For the full interview, check out the video below.

         

        Too long; didn’t watch: Spring Budget 2025 key takeaways — and why it matters more than you think

            • Construction and defence sectors get a boost through new funding and innovation spend — with knock-on benefits for anyone in those supply chains.

            • Entrepreneurship needs support — now more than ever — through community, access, and smarter tools.

            • Tougher HMRC penalties on late payments, and “Time to Pay” might not be as flexible and beneficial as you once thought.

            • National Insurance and wage increases are hitting businesses hard — so it’s wise to explore salary sacrifice schemes that could save your business (on average) £50k–£150k.

            • VAT and tax loans are becoming more cost-effective than government options.

            • The rising cost of labour is accelerating the shift toward automation and smarter planning.

          Now’s the time to build contingency plans, stress test your cash flow, and explore ways to save or fund better while rates are still in your favour.

           

          Growth takes a knock

          The overall economic outlook is looking tough for SMEs. The threat of those Trump tariffs looming is expected to knock a further 1 percent off our growth forecast. On top of that, government debt is at its highest level since the 1960s, which unfortunately means potential cuts to things like welfare and the possibility of tax rises later in the year.

           

          Don’t be afraid of R&D tax credits

          On the research and development (R&D) front, there weren’t any immediate changes, which is good news. There has been some anxiety around claiming R&D Tax Credits as HMRC is clamping down on fraud and investigating one in five claims. At Swoop, we know that these credits can make a huge difference to a business (we use them ourselves), which is why we have an in-house team to make sure that if you do qualify under the scheme, you can make a claim.

          Read more: our guide to R&D tax credits.

           

          Pinch points: National Insurance, minimum wage, and HMRC’s new stance

          The rise in National Insurance and the increase in the minimum wage, while aimed at boosting workers’ pockets, are definitely going to squeeze your finances and profit margins. The London Chamber of Commerce and Industry (LCCI) surveyed 150 London SMEs and found that about half are considering scrapping or lowering pay increases and halting new hires just to stay afloat.

          Andrea also highlighted a significant shift in how HMRC is operating. Previously, HMRC has given very good terms for businesses which wish to spread their tax payments – effectively extending a line of credit and making themselves a “cheap bank”. There has been a shift in attitude with the introduction of much higher penalties for late payments and increased interest rates on “time to pay” arrangements for VAT and self-assessment. If you’ve been reliant on “time to pay” to ease your cash flow, you may have to think again. VAT and corporation tax funding are looking more competitive and on better terms than HMRC.

          Read more: understand how VAT loans work and avoid penalties from HMRC.

          What can you do to mitigate the National Insurance and minimum wage rise? Andrea’s suggestions included introducing salary sacrifice schemes for pensions, EV car schemes, cycle-to-work initiatives, or even holiday trading schemes. These can be a great way to boost employee engagement and make everyone’s money stretch a little further.

           

          Where’s the growth supposed to come from?

          The government keeps talking about growth, but struggling SMEs may wonder where it’s actually going to come from. Andrea pointed to a few key areas:

             

              • Defence spending: With an extra £2.2 billion going to the Ministry of Defence, this could lead to new contracts for suppliers in the defence sector. Historically, there’s also a link between defence spending and innovation, so this could have wider economic benefits down the line.

              • Construction boost: There’s good news for the construction sector with planning reforms aimed at increasing house building (backed by existing funding) and a planned increase in capital spending for infrastructure projects (more details coming in June). Plus, a significant £625 million fund is being launched to upskill construction workers, which is crucial for tackling the current skills shortage.

            Even with these measures, though, growth is expected to halve

            Andrea’s take is that in tough times, people’s priorities shift. The key is to identify those new needs and adapt your business to meet them. This could mean looking at ways to cut costs within your business, seeking better deals on your existing financial products and streamlining your borrowing.

            Now might be the time to consider options like getting funding to own your business premises or exploring equity investment to take your business to the next level. And remember, despite the revised forecast, the government’s central mission is still stated as growth, with a focus on supporting key sectors through the National Wealth Fund, reducing regulation, and an “AI opportunities action plan.”

             

            The road ahead for Britain’s SMEs

            2025 and beyond are likely to be difficult for many SMEs, but Andrea is confident that there are ways for most businesses to ease the pain to some degree. Swoop, like Chambers of Commerce and the Federation of Small Businesses, advocates for SME owners as the drivers of economic growth and believes that we should be at the heart of future budget discussions. We all agree on the need for measures that truly answer the needs of our sector.

            Want to stay informed about all things business finance? Sign up to the newsletter and join over 95,000 other SMEs getting their business funding news and updates from Swoop.

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              Written by

              Ian Hawkins

              Ian Hawkins is Head of Content at Swoop. As a freelance business journalist and filmmaker he has reported from Europe, Central and North America and Africa. His films and writing have appeared on BBC World, Reuters and CBS, and he has spoken at conferences on both sides of the Atlantic on subjects including data, cyber security, and entrepreneurialism.

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