With the Spring Statement 2025 fast approaching, businesses, recruiters, and contractors are keeping a close eye on what the Chancellor might announce. While the government has pledged to limit tax changes to once a year, economic pressures could force their hand.

Here’s what we at FCSA would like to see from the Spring Statement—real, practical measures that support the flexible workforce, strengthen compliance, and drive economic growth.

1. No Further Increases to Employer’s National Insurance Contributions (ErNICs)

Last year’s hike in ErNICs to 15% was a major blow to businesses. It’s a tax on jobs, plain and simple, increasing hiring costs and putting pressure on wages. The government should reconsider this increase—or at the very least, offer some relief for small businesses.

2. Coherence on Umbrella Company Reform

Government has committed to cleaning up the umbrella sector, which is something we fully support. The nature of the announcement in the Autumn Budget came as a shock to compliant firms, and it became increasingly unclear how HMRC would avoid creating more problems than they solve. DBT’s amendments to the Employment Rights Bill pave the way to a new workable solution – and a regulator, the Fair Work Agency (FWA). We hope the Chancellor will adjust to developments since the Budget, consider suggested alternative routes to umbrella regulation and use the new provisions in the Employment Rights Bill to avoid destabilising the well-functioning and compliant majority market.

3. Cracking Down on Payroll Pirates

Regulation is only as good as its enforcement which is why we support Umbrellas being brought into scope of the FWA. However, if the government is serious about tackling tax avoidance and non-compliance, then it needs to properly fund the FWA and HMRC compliance teams. Businesses doing things the right way shouldn’t be the ones facing all the scrutiny while non-compliant models continue to operate unchecked, which is why enforcement resources must be properly targeted. Merely shifting the liability to recruiters won’t work.

4. A Sensible Approach to Statutory Sick Pay (SSP) Reform

SSP reform is coming, but it must take into account the realities of temporary work. We’ve already raised concerns about how this could impact umbrella companies, recruitment agencies and small businesses, particularly when it comes to workers between assignments. The Statement needs to provide clear guidance and cost mitigations. 

5. Better Support for Small Businesses and the Self-Employed

Small businesses and the self-employed drive economic growth, yet they’re often treated as an afterthought in tax policy. Measures like tax relief for training costs, better access to finance, and support for digital transformation would make a real difference.

6. Realistic National Minimum Wage Implementation

The increase in National Minimum Wage is welcome, but businesses need realistic timeframes and support to adjust. This is particularly important for sectors reliant on temporary workers, where last-minute wage hikes can cause major disruption. We welcome engagement from the Low Pay Commission and look forward to them meeting our members.

7. More Investment in Digital Tax Solutions

HMRC’s new umbrella pay calculator and its push for e-invoicing show a move towards more digital tax compliance. That’s a good thing—but only if the tools actually work. Further investment in user-friendly, well-integrated payroll and tax solutions would make compliance easier for everyone. We welcome the engagement commitments made by HMRC’s Making Tax Digital Team.

8. Making the Apprenticeship Levy Work for Everyone

With over £3.5 million already pledged to the FCSA Levy Network, businesses clearly want to invest in training and upskilling. The problem? The current rigid structure of the Apprenticeship Levy makes it hard for temporary and contract workers to benefit. We need more flexibility so that funding can be used where it’s actually needed. We want the Apprenticeship Levy transfer limit to be increased so more apprenticeships can be supported through levy transfers and the duration of courses to be decreased

9. Fixing IR35 Once and for All

IR35 is still causing headaches. Businesses and contractors alike need simpler, clearer compliance rules, and the CEST tool needs serious improvement. The government should also focus on tackling tax avoidance properly, rather than unfairly penalising those trying to follow the rules.

10. Whitehall Efficiency Savings

Since the Budget we’ve all had to cut our cloth accordingly – We believe Government should do the same and lead by example. We are encouraged that the Government has created a new priority of “rooting out waste and inefficiency” for its new ‘Office for Value for Money’ (OVfM). FCSA believes there are many savings to be made and that the creation of the FWA can serve as a model for rationalising the total number of regulators and public bodies, whilst enhancing their effectiveness.

What Happens Next?

The Spring Statement is a crucial moment for the contracting and recruitment industry. At FCSA, we’re pushing for practical, well-thought-out policies that support the workforce while keeping compliance standards high – and driving them ever higher. We’ll be watching closely and continuing to engage with policymakers to ensure that the needs of our sector are heard.

A version of this article was first published on Contractor UK