Spring Statement 2025: Key Tax Changes You Need to Know
Spring Statement 2025: Key Tax Changes You Need to Know
As part of its Spring Statement 2025, the Chancellor of the Exchequer, the Rt Hon Rachel Reeves MP, has announced several key tax-related measures that could affect both individuals and businesses. Here at Hawkins & Co Accountants & Bookkeepers Ltd, we want to ensure that our clients stay informed about these updates so they can take proactive steps to stay compliant and maximize their tax efficiency.
1. Closing the Tax Gap: Offshore Non-Compliance
Starting from April 2025, HMRC will introduce a new team aimed at tackling wealthy offshore non-compliance. This initiative will focus on individuals and businesses deliberately evading tax in the UK. Over the next five years, this team will increase its resources by 400 staff members, and it is estimated that this will generate over £500 million to help close the tax gap. It’s important to ensure that all income, including offshore earnings, is declared accurately to avoid potential penalties.
2. Direct Recovery of Tax Debts: A Renewed Focus
Since 2016, HMRC has had the power to recover established tax debts directly from customers’ bank accounts if certain conditions are met. Although the use of these powers was paused during the COVID-19 pandemic, HMRC will be resuming this practice. DRD will only be used in cases where customers have the funds to pay but refuse to engage with HMRC. HMRC is also exploring automated systems to collect lower-value debts more efficiently.
If you have any concerns about potential tax debts or overdue payments, it’s crucial to engage with HMRC early to avoid such drastic measures.
3. Consultation on Strengthening Standards in the Tax Advice Market
The government has launched a consultation to explore ways of strengthening HMRC’s ability to take action against professional tax advisers who contribute to non-compliance in their clients’ tax affairs. This consultation is open from March 26 to May 7, 2025, and may result in changes such as expanded information powers, harsher penalties for advisers, and greater transparency in the tax advice market. As always, we are committed to upholding the highest standards of professionalism and compliance, so you can rest assured that our advice remains reliable and in line with these future changes.
4. Making Tax Digital (MTD): Streamlining Tax Submissions
The government continues its roll-out of the Making Tax Digital (MTD) initiative. Starting in April 2025, businesses and individuals using MTD for Income Tax will be required to submit their end-of-year information and final tax return through MTD-compatible software. This transition is designed to simplify the process and reduce the number of systems used.
If you’re unsure about which software will best meet your needs, our team at Hawkins & Co can help guide you through the options available, from tailored software for specific sectors like landlords or sole traders to more general solutions.
Additionally, from April 2028, MTD will apply to sole traders and landlords with income over £20,000. If your income falls into this bracket, it’s essential to ensure that your records are maintained digitally and that you are ready to submit tax updates using MTD-compatible software.
5. Personal Tax Policy Changes: Updates on Exemptions
Several customer groups, including Ministers of Religion and recipients of specific allowances, such as the Blind Persons’ Allowance, will be deferred from the MTD mandate until at least April 2029. Further exemptions may also be introduced for individuals who would face significant barriers in operating MTD.
6. Encouraging Direct Debit Payments for PAYE and VAT
HMRC is encouraging businesses to use Direct Debit for PAYE and VAT payments, as it simplifies the payment process and reduces the chances of late payments or errors. By setting up Direct Debit, businesses can ensure they pay on time and avoid potential penalties.
We recommend reviewing your payment methods to determine if switching to Direct Debit is beneficial for your business.
7. High Income Child Benefit Charge (HICBC): New Digital Service
From summer 2025, eligible individuals who become liable for the High Income Child Benefit Charge (HICBC) will be able to report their family’s Child Benefit payments through a new digital service. This service will allow HICBC to be paid directly through PAYE, reducing the need for some individuals to register for Income Tax Self-Assessment. For those affected, we will keep you updated on the rollout of this service.
8. Late Payment Penalties: A Change in Structure
HMRC is increasing the penalties for late payments starting from April 1, 2025. If you miss the deadline for tax payments, you will face a 3% penalty at 15 days and another 3% at 30 days. After 30 days, penalties will increase to 10% per annum. If you’re experiencing difficulties paying on time, it’s important to contact HMRC and consider making a Time to Pay arrangement to avoid these additional charges.
9. Tax Implications for Trading Shares on PISCES
The new Private Intermittent Securities and Capital Exchange System (PISCES), a regulated stock market for private company shares, will be introduced later in 2025. This will allow employees to trade their shares on a secondary market, and the government has published a technical note to clarify the tax implications of this new system. If you plan to trade shares through PISCES, we recommend consulting with us to fully understand the tax consequences.
10. Other Key Consultations and Policy Papers
In addition to the changes above, several other consultations are currently open, covering topics such as:
- Tackling tax avoidance promoters
- Behavioural penalty reforms
- Research and Development (R&D) reliefs
- Improved use of third-party data
We will continue to monitor these developments and provide updates to help you navigate any new changes that may impact your tax affairs.
Stay Informed and Plan Ahead
As always, we are here to help you stay ahead of any changes that might affect your tax position. If you have any questions about these updates or need assistance preparing for the upcoming changes, don’t hesitate to reach out to the team at Hawkins & Co Accountants & Bookkeepers Ltd.
You can also find detailed information on all the measures announced in the Spring Statement 2025 on the official GOV.UK website.
Stay compliant and let us help you navigate these changes with ease.
How Hawkins & Co Can Help
At Hawkins & Co, we’re here to help you navigate the recent tax changes and ensure you remain compliant. Whether you need assistance with Making Tax Digital (MTD), tax debt management, or tax planning, our expert team can provide the support you need to stay ahead.
For advice and guidance, get in touch with us today:
Phone: 01279 812277
Email: Abby@
Website: www.
