You would be forgiven for thinking that the recent Spring Statement was something of a “non-event.”
The absence of major tax announcements was striking – there will be no rollback of last year’s tax rises, no fresh reliefs, and no new incentives to drive growth and innovation.
However, there are some key tax takeaways that accountants should pay attention to.
Here are the tax highlights from the Spring Statement.
“No further tax increases” – but no support for businesses
Sticking to her commitment, the Chancellor confirmed there would be “no further tax increases” beyond those introduced in the Autumn Budget.
While a freeze on tax rises might sound like welcome news for individuals concerned about their personal liabilities, the reality for business owners is more disappointing.
There are no fresh reliefs, no easing of existing burdens, and no incentives to spur investment, innovation, or growth.
Businesses had hoped for reform to Corporation Tax, cuts to National Insurance, or enhanced allowances for capital expenditure and R&D.
At a time when many enterprises are still recovering from rising employment costs, interest rates, and ongoing uncertainty, the absence of tax-based support could dampen confidence.
Labour’s tax evasion crackdown
The Chancellor announced a further crackdown on tax evasion, aiming to increase prosecutions of tax fraud by 20 per cent and take total revenue raised from reducing tax evasion to £7.5 billion.
She emphasised fairness, stating that it is wrong for some to avoid taxes while working people pay their share.
For businesses, stronger enforcement prevents competitors from gaining an unfair advantage – for individuals, it reinforces trust in the tax system and ensures public services are funded without raising taxes.
The extra revenue could also reduce pressure for future tax increases, supporting broader economic stability.
Changes to MTD for ITSA: Quietly announced, massively important
One of the most significant updates in the wider Spring Statement document (but, interestingly, not included in the Chancellor’s speech) was the confirmation of the phased rollout of Making Tax Digital for Income Tax Self-Assessment (ITSA).
From April 2026, the scheme will apply to sole traders and landlords earning over £50,000 and to those earning over £30,000 in 2027. Now, this is expanding to those with income above £20,000 by 2028.
This gradual lowering of the threshold means around 900,000 sole traders will be brought into the MTD regime by 2028.
As part of this scheme, HMRC will be cracking down on late payments of both VAT and Self-Assessments.
Previously, taxpayers would incur a penalty of two per cent of the tax owed if the outstanding tax was not paid within 15 days and four per cent if the tax was not repaid within 30 days.
Now, taxpayers within the MTD scheme will face a 3 per cent charge on any outstanding tax if it remains unpaid after 15 days, with a further 3 per cent added if the amount is still overdue at 30 days.
In addition, the annualised interest rate applied to late payments will more than double, rising from the current 4 per cent to 10 per cent.
Those who are yet to react to MTD for ITSA due to the small scale of their business operation will now need to act quickly to avoid being caught outside of the scheme in the years to come.
ISA reform on the horizon
Though not mentioned in the Chancellor’s speech, the larger document released at the same time hints at potential reforms to Individual Savings Accounts (ISAs) to “get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission.”
This could mean a decrease in the tax-free allowance currently offered by these savings vehicles.
Tax advisers are needed more than ever
Now more than ever, business owners and individuals need tax advisers to help assess their position and review their tax planning strategies.
If you require a second opinion on a complex area of tax or need a full tax advisory support service, we’re here to help.
Contact our experts today for specialist tax advice.
