Spring Statement 2025

March 2025

Key Tax Takeaways

From a tax perspective, the Spring Statement didn’t bring many surprises but it did confirm that big changes are coming from April 2025.

While businesses do need to prepare for higher payroll costs, stricter compliance rules and tougher penalties for non-compliance, you don’t have to navigate these changes alone – we’re here to guide you through what it means for your business, while giving you peace of mind.

HMRC Crackdown

No new tax increases, but HMRC is gaining greater powers to tackle evasion, avoidance and fraud, aiming to raise £1bn by 2030 and increase tax fraud prosecutions by 20%.

Plans include tougher action on deliberate company insolvencies to avoid tax, a revamped informant reward scheme, advanced clearances for R&D reliefs and improved joint efforts between HMRC, Companies House and the Insolvency Service.

While compliance may be becoming more stringent, we’re here to make sure everything is done to the letter.

Stricter Late Payment Penalties

From April 2025, penalties for late Self-assessment and VAT returns will rise and the longer the tax remains unpaid, the more the penalties will increase.

The new rates will be 3% of the tax outstanding where tax is overdue by 15 days, plus 3% if still unpaid at 30 days, plus 10% per annum where tax is overdue by 31 days or more.

But this is nothing to worry about – we’re here to keep you compliant and submissions on time.

Expansion of Making Tax Digital (MTD)

Starting from April 2026, MTD will require sole traders and landlords to make quarterly digital submissions, starting with those earning over £50k, dropping to £30k+ in April 2027 and £20k+ by April 2028.

So if you’re still using spreadsheets, now’s the time to consider switching to accounting software to stay compliant.

Frozen thresholds means higher taxes

Income tax thresholds to remain frozen until 2028. This means that even if salaries increase in line with inflation, more people will be pushed into higher tax brackets, increasing tax bills without actual tax hikes.

We can help look at what will be the most efficient means for you and your business / personal circumstances.

October Budget announcements go ahead unchanged

Confirmation that most changes announced in the full October budget will go ahead in April 2025 including:

  • Employer’s NIC rising to 15%
  • Employer’s NIC Threshold dropping to £5k
  • Employment allowance increasing to £10,500
  • National Living Wage increasing
  • Business Rate Relief cut
  • Pensions included in Inheritance Tax calculations from April 2027