The Chancellor’s Spring Statement 2025 delivered as promised – no major tax announcements – but there were important clarifications and updates which may affect you or your business.
We’ve summarised the key points below:
Making Tax Digital (MTD) – Timeline Updates
The government has now confirmed that MTD for Income Tax will apply to most self-employed individuals and landlords with income over £20,000 from April 2028. This brings forward the timeline previously mentioned in the Autumn Budget and expands MTD’s scope to cover more small businesses.
There are no changes to previously announced start dates:
- April 2026 – for income over £50,000
- April 2027 – for income over £30,000
We will be writing to affected clients separately over the coming months to help you prepare for these changes.
Importantly, no dates have yet been confirmed for partnerships or companies under MTD for Corporation Tax.
Late Payment Penalties Increasing (MTD for VAT & Income Tax)
From 6 April 2025, the penalty regime for late MTD payments is becoming stricter:
- 15-29 days late: 3% of the tax outstanding at day 15
- 30+ days late: 3% at day 15 plus 3% at day 30
- Ongoing debt: 10% annual penalty added thereafter
These penalties will apply to MTD for VAT and Income Tax.
High Income Child Benefit Charge (HICBC) – PAYE Integration
From summer 2025, employees liable to the HICBC will be able to report and pay via PAYE, removing the need to register for Self-Assessment. This will simplify the process for many higher-earning parents and carers.
Research & Development (R&D) Relief – New Consultation
HMRC has launched a consultation on expanding advance clearance options for R&D claims. The aim is to reduce fraud and provide businesses with more certainty when planning significant R&D investments.
We’ll keep you informed as this develops – especially if you currently make or are considering R&D claims.
Wider Tax Compliance Measures
The government continues its push to close the tax gap, with a suite of new measures, including:
- Increased fraud prosecutions, targeting serious cases
- New whistleblower rewards, offering informants a share of recovered tax (though the effectiveness of this remains to be seen)
- Tackling “phoenixism”, with more directors being made personally liable for unpaid taxes
If you have any questions about how these changes may affect you or your business, please don’t hesitate to get in touch.
