Spring Statement 2025 summary and highlights

The Chancellor of the Exchequer, Rachel Reeves provided an update on the Government’s mission to grow the UK economy against the backdrop of a deteriorating international outlook. This was released alongside a publication of an economic forecast from the Office for Budget Responsibility (OBR).  

Any last-minute hopes of a reprieve to the April National Insurance employer increases were finally dashed as the Chancellor stuck to her previous commitment to just one major fiscal event a year and made no major new tax announcements.  

Here are the main announcements from the Spring Statement affecting you and your business. 

 

Making Tax Digital for Income Tax (MTD for IT) 

MTD for IT is due to commence from April 2026 for sole traders and landlords with turnover over £50,000 and extend to those with turnovers over £30,000 in April 2027.  

It was confirmed in the Spring statement that MTD for IT will now also be extended to sole traders and landlords with turnover over £20,000 from April 2028 which is anticipated to bring a further 900,000 sole traders and landlords within the new regime and who will need to prepare for these changes.   

HMRC will continue to explore how they can roll out the new digital system to a greater proportion of the 4 million sole traders and landlords who have income below the £20,000 threshold.    

Some further exclusions from MTD for IT were announced and include those who:- 

• have a Power of Attorney 
• complete the Residence, remittance basis etc pages and foreign entertainers and sportspeople 
• ministers of religion and Lloyds underwriters 
• are recipients of the married couples allowance or blind persons allowance 

The late payment penalties for VAT which were introduced in January 2023 are to be extended to MTD for IT as individuals enter the same regime and at the same time, the penalty rates will increase to 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. 

Child benefit changes 

From summer 2025, employed individuals liable to the High Income Child Benefit Charge (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 and complete a personal tax return. 

From April 2024, the HICBC threshold was increased to £60,000 from £50,000, meaning fewer parents and families will pay this tax. The rate of tax has also been halved, so that only an individual earning £80,000 (previously £60,000) would need to pay tax equal to the child benefit received for the year.  

Research & Development (R & D) 

The Government has opened a consultation on widening the use of advance clearances for R&D tax reliefs to reduce error and fraud and provide greater certainty to businesses.  

The consultation document notes that it is vital that the R&D reliefs continue to support economic growth, which is a core mission of the Government, and it is hoped any change to the rules genuinely supports businesses making legitimate claims. 

Tax avoidance 

The Government has opened a consultation on new proposals to close in on promoters and enablers of tax avoidance schemes and do more to support individuals steer clear of and exit tax avoidance schemes. 

At TaxAssist, we do not create or promote tax avoidance schemes within HMRC’s definition, and we will only provide advice in relation to genuine tax planning opportunities, to make sure you optimise your tax position and more importantly pay the correct amount of tax. 

Keep up to date with future announcements  

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Last updated 26 Mar 2025 | First published 14 Mar 2025

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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