Well, it started on time and that’s probably the most surprising part of this year’s Spring Statement.
In keeping with the Chancellor’s promise to have just one major fiscal event a year, this one was relatively light on headline-grabbing changes. But dig a little deeper (especially into the HM Treasury documents) and you’ll spot some important shifts aimed at narrowing the tax gap and tightening enforcement.
So while our overall starting point is very much “move along here folks, very little to see here”, the finer details tell a different story – and business owners would be wise to take note.
A glimmer of good news
If all that felt a bit doom-and-gloom, here’s a bit of optimism. The government has confirmed it’s still committed to supporting innovation. In fact, HMRC is now consulting on expanding the use of advance clearances for R&D tax reliefs, a change that could help bring more certainty and less risk for businesses investing in innovation.
This could be especially helpful for scale-ups and tech firms trying to plan ahead with confidence. If successful, it should cut down on error, fraud, and those all-too-familiar post-claim headaches.
Closing the tax gap
The government is stepping up its game when it comes to tax collection, and the message is clear – if you owe money, expect a knock on the door a little sooner than before. Rachel Reeves (RR) made brief reference to tackling tax evasion – though in practice, the line between evasion and avoidance is getting increasingly murky. Either way, HMRC is being handed more resource and more authority to chase down unpaid tax.
That includes a boost in third-party debt collector powers, with an additional 2,400 HMRC staff now focused on speeding up collection. So if you’re hoping old debts will quietly disappear, think again.
New penalties on the horizon
The push is being backed by tougher penalties, particularly around VAT and Income Tax for those moving into Making Tax Digital (MTD). From April 2025 (optional at first, but mandatory in stages from 2026 onwards), new charges will apply as follows:
- 3% of the tax due if payment is 15 days late
- An additional 3% if 30 days late
- 10% per annum interest rate from 31 days onwards
And yes, that’s on top of any interest charged. It’s a clear signal that late isn’t just frowned upon, it’s going to get expensive.
Personal liability for directors?
There’s more. Joint planning between HMRC, Companies House and the Insolvency Service could see more directors being held personally liable for unpaid company taxes, particularly in cases that look like phoenixism (the practice of winding up a company to escape liabilities, then starting a near-identical one).
To be clear, this doesn’t mean every director is suddenly on the hook – so no need to panic – but it does reinforce how important it is to manage your business ethically and responsibly. A solid finance function, good forecasting, and timely advice are more crucial than ever.
Final thoughts
In short: it’s getting harder to hide, easier to be penalised, and more important than ever to stay on top of your tax position. The good news? You don’t have to go it alone. Whether you’re navigating MTD changes, planning an R&D claim, or just want to sense-check your systems, we’re here to help.
Got questions? Drop us a message, let’s make sure your business is set up to thrive, not just survive.
