Wednesday 26^th March 2025 marked this government’s first Spring Statement, the follow-up to the Budget back in October last year. After deciding to hold only one fiscal update every year (in autumn), we expected yesterday’s announcements to bring minimal changes, instead adding clarity to decisions already taken. 

While there was a lot of talk surrounding changes to come – most of which we already know about – there was no real detail given as of yet. We’ll be keeping our ear to the ground on upcoming announcements but in the meantime, we’ve summarised some of the key points that may affect you and your business in the near future below.  

Spring Statement 2025: Key Updates 

Tackling “phoenixism” 

HMRC, Companies House, and the Insolvency Service are delivering a joint plan to tackle those using contrived insolvencies to evade tax and write off debts owed to others. This includes increasing the use of upfront payment demands, making more directors personally liable for company taxes, and increasing the number of enforcement sanctions to double the amount of tax protected to £250 million by 2026. 

Making Tax Digital (MTD) 

The government will expand the rollout of MTD for income tax self-assessment to sole traders and landlords with incomes over £20,000 from April 2028. The government will also make further detailed changes to MTD as set out in the technical note ‘Modernising the tax system through Making Tax Digital’. 

Increasing late payment penalties  

The government will increase late payment penalties for VAT taxpayers and income tax self-assessment taxpayers as they join MTD, from April 2025 onwards. The new rates will be 3% of the tax outstanding where tax is overdue by 15 days, plus 3% where tax is overdue by 30 days, plus 10% per annum where tax is overdue by 31 days or more. 

Direct recovery of tax debts by HMRC 

HMRC will re-start what they have deemed a ‘direct recovery’ of tax debts owed by individuals and companies who have the ability to pay but choose not to do so. The government will also explore options to automate the process for collecting lower value tax debts. 

High Income Child Benefit Charge (HICBC)  

From summer 2025, employed individuals liable to the HICBC will be able to report their family’s Child Benefit payments through a new digital service and opt to pay HICBC directly through PAYE, without the need to register for Self-Assessment filing. 

Wider announcements included:

1. Growth forecast: The OBR has cut growth forecasts for 2025 from 2% to 1%. 

2. Capital spending increase: An increase of £2billion a year relative to the plans set out in the autumn is expected. 

3. Inflation: Forecast to be 3.2% in 2025 (up from 2.6% forecast in October) and falling to 2.1% in 2026, returning to the Bank of England’s 2% target from 2027. 

Conclusion 

We wanted to take this opportunity to reassure our clients that we’re here to provide support and guide you through any changes in legislation.  

As always, we recommend that you get as familiar with your finances as possible and perhaps have a look at your current short-term and long-term strategies. Having these at the forefront of your mind means you can be ready to implement changes to your financial plans if necessary. 

If you’re unsure how best to tackle upcoming changes, or just have general questions, feel free to get in touch with our team who are happy to help. You can also set up a call with your accountant who should be able to talk you through an efficient plan tailored to you. 

Stay Informed 

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