Spring Statement 2025

This has been a regular feature in recent years, and today’s announcement promised a further investment of £100 million for HMRC, which is expected to generate an additional £1 billion in revenue as a result.

Detailed tax points addressed

1. Making tax digital (MTD): In the detailed Spring Statement document, a number of additional tax points were addressed. A policy paper providing further details on ‘Making Tax Digital’ (“MTD”) has been published which sets out plans in relation MTD which is being introduced for sole traders and landlords from April 2026 on a phased basis. The MTD process has not yet been finalised, and the paper acknowledges some of the concerns raised by advisers.
2. Changes to penalty regimes: Changes to the penalty regimes for MTD for VAT and income tax were also outlined in the published Statement. The following new late payment penalties will apply from 1 April 2025 onwards:
   1. 3% of tax outstanding at 15 days;
   2. A further 3% at 30 days;
   3. A further 10% per annum where tax is overdue by 31 days or more.

Consultations announced

1. Research and development (R&D) advance clearance procedure: A number of consultations were also announced in the Statement, including a consultation on a new Research and Development (“R&D”) advance clearance procedure. R&D tax credit claims have been an area of focus for HMRC due to the volume of erroneous and fraudulent claims. While a clearance procedure is welcomed, its effectiveness will depend on the quality of HMRC’s review process.
2. Technical Note on PISCES: A technical note on the tax implications for companies and employees in relation to shares traded on the Private Intermittent Securities and Capital Exchange System (PISCES) was published. The note provides clarity on several points raised in a previous consultation on this subject.

Unaddressed concerns

The Statement, therefore, does not contain any major tax changes. However, what the Chancellor did not address may be of greater significance.

Since the Autumn Budget (2024), concerns have been raised by several business and farming representative bodies regarding both the changes made to the inheritance tax regime and the increased costs of employing staff due to the rise in the national minimum wage and national insurance contribution rates. No rollback of these changes was announced, and despite being questioned specifically on the matter, the Chancellor did not indicate that any mitigation would be introduced in the short-term.

These changes, as they start to bite next month, will therefore continue to weigh heavily on the minds of business owners and their impacts should continue to be reviewed.