On Wednesday, the Chancellor Rachel Reeves MP delivered her Spring Statement following the most recent forecast from the Office for Budget Responsibility (OBR). As anticipated, there were not many changes announced, tying in with the government’s decision to only have one major fiscal event a year. Unfortunately, the government did not use this opportunity to address the various concerns of the automotive industry. However, we have included the relevant documents and announcements that may impact your business/employees/customers, please find these listed below: Key documents: Budget – March 2025 full document – Link Here Press Release: Spring Statement 2025 – Link Here NFDA Press Release: Spring 2025 – SPRING STATEMENT PRESS RELEASE 1.pdf Office for Budget Responsibility: Economic and Fiscal Outlook March 2025- Link Here Key announcements: Borrowing and debt – are expected to be higher than previously forecast. Tariffs – OBR predicts that if global trade disputes escalate to include 20% tariffs between the USA and the rest of the world, it could reduce economic growth by as much as 1%. Key updates from the autumn budget that will come into effect from April: Vehicle exercise duty (VED): Electric vehicles (EVs) are no longer exempt from paying VED or car tax. EVs registered after 1 April will pay the lowest first year rate at £10 until 2029. Those that cost more than £40,000 will also have to pay the £425 a year ‘Expensive Car Supplement’. EVs registered between 1 April 2017 and 31 March 2025 will now have to pay the same standard rate of road tax (£195 a year) as all other motorists. Rates for cars emitting 1-50 g/km of CO2, including hybrid vehicles, will increase to £110 for 2025-26. Rates for cars emitting 51-75 g/km of CO2, including hybrid vehicles, will increase to £130 for 2025-26. All other rates for cars emitting 76 g/km of CO2 and above will double from their current level for 2025-26, so an extra £220. Inheritance tax: The government will reform the inheritance tax reliefs from 6 April 2026. In addition to existing nil-rate bands and exemptions, the current 100% rates of relief will continue for the first £1 million of business property to help protect family businesses. The rate of relief will be 50% thereafter, and in all circumstances for quoted shares designated as “not listed” on the markets of recognised stock exchanges, such as AIM. Business rates : In 2024-25, the Exchequer has spending £1.3bn in business rates relief for retail, leisure and hospitality properties. As retailers, all car dealerships have benefitted from this relief which is set at 75% up to a cash cap of £110,000. In 2025-26, the Government is cutting RHL relief to 40%, costing the Exchequer around £700 million. In 2026-27, the Exchequer is withdrawing all this funding and instead asking large commercial properties with a Rateable Value of over £500,000 to pay for a lower rate (up to 20% lower) for RHL properties with a value of less than £500,000. This measure is effectively a “stealth tax” of £1.3 billion on commercial property. Larger showrooms with a rateable value above £500,000 will perversely be incentivised to reduce their floorspace to avoid paying a higher business rate multiplier in 2026 (up to 10% higher than the standard multiplier). Employment and wages Employer national insurance contributions: The government is increasing the rate of employer National Insurance contributions (NICs) from 13.8% to 15% and reducing the per employee threshold at which employers become liable to pay National Insurance (the Secondary Threshold) from 6 April 2025 to £5,000. Minimum wage increase: National Living Wage for people aged 21 or older will rise by 6.7% from £11.44 an hour to £12.21 from April. The National Minimum Wage will rise for people aged between 18 and 20 years old from £8.60 to £10 whilst Apprentices will see an increase from £6.40 to £7.55 If you have any further questions, please direct them to either james.price@rmif.co.uk or Murat.Omercik@RMIF.co.uk .