On 26th March, Chancellor Rachel Reeves announced the Spring Statement, outlining the upcoming changes to government spending. In this article, our tax team discuss the changes that have been announced and reflect on upcoming deadlines from the Autumn Budget.
A recap of previous changes coming into effect
Some of the tax changes announced in the Autumn Budget in 2024 are due to come into effect within the next month:
- Stamp Duty Land Tax cuts will end on 31st March 2025
- Employers’ National Insurance Contributions will increase by 1.2% to 15% from April 2025
- Furnished Holiday Lets regime will be abolished from April 2025
The government has announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from 1 April 2025. The rates which will apply are as follows:
| NLW | 18-20 | 16-17 | Apprentices | |
|---|---|---|---|---|
| From 1st April 2025 | £12.21 | £10.00 | £7.55 | £7.55 |
The apprenticeship rate applies to apprentices under 19 or 19 and over in the first year of apprenticeship. The NLW applies to those aged 21 and over.
Key measures announced in the 2025 Spring Statement
In the 2024 Autumn Budget, it was confirmed that Making Tax Digital (MTD) for Income Tax will start from April 2026 for sole traders and landlords with qualifying income over £50,000 and extend to those with incomes over £30,000 in April 2027.
As outlined in the documents released following the 2025 Spring Statement, MTD for Income Tax will now also be extended to sole traders and landlords with income over £20,000 from April 2028.
Whilst the Spring Statement did not contain any further tax increases, the Chancellor announced various changes to other areas of spending.
This included investment in HMRC’s technology to help crack down on tax evasion, which is forecast to raise a further £1 billion, and other Artificial Intelligence (AI) tools to ‘modernise’ the country.
A consultation has also been launched to reform Behavioural Penalties to improve the penalty framework of financial penalties that apply where inaccuracies are found in returns and documents submitted to HMRC, and where taxpayers do not meet their obligations to notify HMRC of circumstances that affect their tax liability.
Following feedback received in recent calls for evidence, this consultation proposes 2 different approaches to reforming penalties for inaccuracies and failure to notify:
- Reforming the existing framework: this approach would retain key aspects of the existing penalty system but simplify how penalties are calculated and applied. This could involve reducing the number of penalty categories, standardising how behaviour is assessed, and making the rules clearer and easier to follow.
- Exploring an alternative model: this approach considers a more fundamental redesign of penalties to improve clarity and consistency. It looks at whether a different structure could better achieve fairness, compliance, and deterrence while reducing complexity for taxpayers, agents, and HMRC.
The consultation will run for 12 weeks from 26th March to 18th June 2025.
Frozen thresholds and allowances continue to keep the tax burden at 37.7% of GDP and the Chancellor confirmed that welfare benefits will be cut by £4.8 billion, with the Universal Credit Health element facing a cut of 50% and then frozen for new claimants.
A rise in spending in defence and new housing as well as technology for the probation service and investment to support children into foster care were also announced during the statement.
How we can assist
With changes from the previous Budget on the horizon, it is important to be prepared. Our tax team can provide further information and tailored advice regarding the key changes announced in the Spring Statement 2025. Get in touch with us to discuss your needs with one of our experts today.
For a full breakdown of the Spring Statement announcements, you can download our publication below.
