Rachel Reeves focused mainly on cuts to welfare spending (approximately £14 billion) to meet the Government’s fiscal targets and cover the costs of high-tech defence. The Statement also concentrated on long-term economic growth and financial stability, writes Nicola Averell, Associate Partner at Sumer Northern Ireland.
As promised by the Government, there were no further tax increases, however, measures to help counteract tax evasion were addressed. The Chancellor referred to a new HMRC reward scheme for informants, which will be introduced this year to target serious non-compliance by large corporates and high net worth individuals, as well as offshore and avoidance schemes. The new scheme will reward ‘whistle blowers’ with compensation linked to a percentage of any tax recouped due to their actions.
Unfortunately, there was no rolling back on the significant changes stated in the Autumn Budget last year which impact UK Inheritance Tax and National Insurance. Penalties for late payment of income tax under self-assessment are set to double to 10% from 1 April 2025, with further rises in the penalty the longer the tax remains unpaid.
Research and Development Tax Relief
In relation to Research and Development (R&D) tax relief which provides tax breaks to companies that work on innovative projects in science and technology, the Government has launched a consultation. The purpose of this is to seek views on widening the use of advance clearances for R&D tax relief to reduce error and fraud, provide certainty to businesses and improve the customer experience. The consultation launched on 26 March 2025 runs until 26 May 2025.
Making Tax Digital Updates
HMRC’s Making Tax Digital (MTD) for Income Tax regime will now include sole traders and landlords with income above £20,000 from April 2028, an acceleration to the timeframe of what had previously been expected. MTD for Income Tax is being introduced in phases from April 2026 for relevant self-employed individuals and landlords. Additionally, HMRC has now told taxpayers that they will have to use third party software to submit quarterly returns, as HMRC’s free service will not be available.
High Income Child Benefit Charge
Families are liable for the ‘High Income Child Benefit Charge’ (HICBC) where at least one parent earns more than £60,000 annually. Currently, once they are earning above the threshold, if claiming child benefit, they must repay some or all of it by completing a self-assessment tax return. However, from summer 2025, parents will be able to report their child benefit through a new digital service and opt to pay the HICBC directly through PAYE, without having to register for self-assessment.
Looking Ahead
Whilst there have been no announcements in relation to increased tax rates in this Spring Statement, there is a lot of speculation that these will be unveiled in the next Autumn Budget. With several of the already announced changes kicking in from April 2026 and April 2027, now is the time to review your affairs and plan ahead.
For those seeking guidance in relation to how the most recent Budget and Spring Statement may impact you personally or your business, please reach out to the tax team at Sumer Northern Ireland.
