Spring Statement 2025 – key takeaways

On 26 March 2025, Chancellor Rachel Reeves delivered her Spring Statement. With slow economic growth and rising government borrowing costs, she’s sticking to her ‘non-negotiable’ fiscal rules—which means no new tax cuts or rises for now. Instead, the focus is on government spending, with a major review set for 11 June 2025 to plan spending from 2026/27 to 2028/29.

Self-assessment

High-Income Child Benefit Charge (HICBC)

• If your income is over £60,000 and you or your partner receive Child Benefit, you’ll be subject to the HICBC.
• The charge is 1% of the Child Benefit for every £200 of income over £60,000. Once you hit £80,000, the benefit is fully clawed back.
• From summer 2025, employees can pay HICBC via PAYE, skipping the need to file a Self-Assessment return.

Trading Income & Self-Assessment Changes

• If you buy and sell goods, rent out property, or generate side income, tax may be due.
• Good news: If your trading or property income is under £1,000, it’s tax-free and doesn’t need reporting.
• If your income is between £1,000 and £3,000, a simplified online reporting system is coming soon, reducing the need for full Self-Assessment returns.

Making tax digital (MTD) – big changes from 2026

Who’s Affected?

If your total trade and rental income exceeds:
 ✔ £50,000 in 2024/25 → You must comply from 6 April 2026.
 ✔ £30,000 in 2025/26 → You must comply from 6 April 2027.
 ✔ £20,000 in 2026/27 → You must comply from 6 April 2028.

What Does This Mean?

• You’ll need MTD-compatible software to digitally record income and expenses.
• Quarterly updates will be required, plus an MTD-only end-of-year tax return—HMRC’s free system won’t be an option.
• Some exemptions will apply—ask us if you’re eligible.

Want to get ahead? You can trial MTD voluntarily before the deadline—let’s chat.

Employment texes

Employer National Insurance Contributions (NICs) – BIG CHANGES FROM 6 APRIL 2025

✔ Rate increase from 13.8% to 15%.
 ✔ Threshold drop – NICs kick in at £5,000 (down from £9,100).
 ✔ Employment Allowance up – Eligible employers can claim £10,500 (up from £5,000).
 ✔ No more £100k cap – Even if you paid more than £100k in NICs last year, you may still be eligible for the allowance.

Not sure if you qualify? Let’s check.

Tax on capital assets

Capital Gains Tax (CGT)

• Business Asset Disposal Relief (BADR) rate rising:
  • 2025/26: 14% (up from 10%).
  • 2026/27: 18%.
• Most CGT rates stay at 18% (basic rate) and 24% (higher rate).
• Thinking of selling a business? Timing matters—let’s plan ahead.

Inheritance Tax (IHT) – Business & Agricultural Assets

• From 6 April 2026, 100% IHT relief will apply to the first £1m of business/agricultural assets.
• Over £1m, relief drops to 50%.
• AIM shares relief is cut from 100% to 50%.
• Pre-2026 gifting won’t necessarily avoid this—speak to us first!

Business tax updates

E-Invoicing

• The government is exploring digital invoicing, aiming for faster payments, fewer errors, and better cash flow.

Trading with the USA

• A new UK-US digital trade pilot aims to speed up cross-border transactions.

R&D Tax Relief – Stricter Rules Coming

• HMRC wants more oversight, considering mandatory pre-approval for some claims.
• A possible £25,000 minimum claim threshold is under review.
• Considering an R&D claim? Make sure your application is watertight—we can help.

Tackling tax avoidance & fraud

HMRC Cracking Down on ‘Phoenixism’

• Directors winding up companies to avoid tax will face tougher enforcement.
• Expect personal tax liabilities for more directors.

New PAYE Portal from April 2025

• 34 million taxpayers will get a new online system to check PAYE details, update HMRC, and understand tax codes.

HMRC & AI – What’s Coming?

• AI-powered customer service trials are underway.
• Voice recognition security will expand.

New Tax Fraud Whistleblower Rewards

• HMRC will pay informants for reporting tax fraud in large businesses, offshore accounts, and avoidance schemes.

Stamp duty land tax (SDLT) changes from 1 April 2025

England & Northern Ireland

• The 0% rate threshold drops from £250,000 to £125,000.
• A new 2% rate applies between £125,001 and £250,000.
• First-time buyers: The 0% threshold drops from £425,000 to £300,000.

Scotland & Wales

• SDLT doesn’t apply, but Land Transaction Taxes have increased on additional dwellings.

Dealing with HMRC – compliance & penalties

Late Payment Penalties (MTD) – From April 2025

• 3% penalty after 15 days.
• Another 3% after 30 days.
• 10% per annum for unpaid tax beyond 31 days.

Interest on Unpaid Tax – From 6 April 2025

• Late payment interest increases to Bank of England base rate + 4%.

Final thoughts

The Spring Statement brought some big tax changes, especially around MTD, National Insurance, CGT, and IHT reliefs. With stricter compliance, higher penalties, and more digital systems, keeping up-to-date is more important than ever.

Got questions? Get in touch, and let’s make sure you’re ahead of the game.