Spring Statement 2025 – key tax announcements

The Chancellor delivered the Spring Statement today, as planned. The Spring Statement speech was relatively short compared to those delivered at prior fiscal events, finishing in just over half an hour. In line with recent press speculation and statements from members of government, today’s Spring Statement was not a budget nor an “emergency budget”, with its primary focus remaining on spending.

However, whilst it was confirmed early on in the speech that no tax increasing measures would be announced, a number of tax-related documents have subsequently been released. Primarily, these are comprised of new tax consultations relating to a few key areas (tax certainty, penalty reform, tax administration and compliance, and combatting tax avoidance and evasion), but also include further technical information and draft legislation relating to PISCES (a new type of regulated trading platform, that allows for the intermittent trading of private company shares on a multilateral system).

This article summarises today’s key tax announcements.

Tax certainty

Consultations have been released on the following.

1. A new process to give major projects increased tax certainty in advance. That this consultation would be released was originally announced at the Autumn Budget 2024, as part of the government’s Corporate Tax Roadmap. The government has also announced that businesses will be able to obtain certainty on the transfer pricing treatment of Cost Contribution Arrangements (“CCAs”) through the UK’s existing Advance Pricing Agreement (“APA”) programme.
    
2. A new system of advance clearances for research and development (“R&D”) tax reliefs, in order to minimise error and fraud relating to claims for R&D reliefs, and to provide more certainty to businesses.

Behavioural penalty reform

A consultation has been released on options to simplify and strengthen the behavioural penalties which can be levied for inaccuracies and failure to notify. The release of this consultation follows the “Tax Administration Framework Review – enquiry and assessment powers, penalties, safeguards” consultation, which was published during February 2024, and was followed by a summary of responses in October 2024.

Tax avoidance, evasion, compliance and administration

The only mention of tax in the Chancellor’s speech was a commitment to introduce measures to further “crack down” on tax evasion, which would go further than as previously announced at the Autumn Budget 2024.

The announcements today include a commitment to enlarge HMRC’s anti-fraud capabilities to increase the number of annual charging decisions for the most harmful fraud by 20%.

In addition, HMRC will overhaul its approach to offshore tax non-compliance by the wealthy via recruiting experts in private sector wealth management, using AI and advanced analytics to identify and challenge those “hiding” wealth, and will increase the resource for tackling wealthy offshore non-compliance by circa 400 people.

The government has also announced it will recruit 500 more HMRC compliance staff (in addition to the 5,000 new compliance staff whose recruitment was announced at the Autumn Budget 2024), and further invest in HMRC’s debt management capacity. This will include a “test and learn pilot” to collect more aged debts, increasing the use of automated debt recovery, and the recruitment of an additional 600 debt management staff.

The following consultations and technical documents have been released.

1. A consultation on new measures which are proposed to close in on promoters of tax avoidance. This includes granting HMRC further powers and stronger sanctions to enable HMRC to better disrupt the business models which are used by tax avoidance promoters. In particular the consultation seeks views on proposals to:
   • increase the scope of the Disclosure of Tax Avoidance Schemes (“DOTAS”) regime;
   • introduce a Universal Stop Notice and Promoter Action Notice;
   • grant HMRC stronger information powers in order to investigate those who own and control organisations which promote tax avoidance;
   • prevent legal professionals from designing, or contributing to, the promotion of tax avoidance schemes.
      
2. A consultation on options to improve HMRC’s powers and sanctions for taking action against professional tax advisers who facilitate non-compliance relating to their client’s tax affairs. Options proposed include expanding information powers against tax advisers, increasing penalties which can be levied on tax advisers who contribute to the tax gap, publishing details of tax advisers who are the subject of HMRC sanctions, and greater information sharing with professional bodies.
    
3. A technical note on Making Tax Digital (“MTD”) for income tax, to extend MTD to a wider range of businesses, and to introduce MTD improvements.
   
   HMRC will continue to engage with stakeholders on this topic prior to the introduction of legislation, which will make MTD for income tax mandatory for certain businesses from April 2026, and for further businesses from April 2028.
   
   The government has also announced that it will increase late payment penalties for VAT taxpayers and income tax self-assessment taxpayers as they join MTD from April 2025 onwards. The new rates will be 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.
    
4. A consultation on improving the quality of data which is acquired from third parties under HMRC’s bulk data gathering powers, in order to improve tax compliance and further close the tax gap. Views are sought in particular from financial institutions (including banks and building societies) and providers of card acquiring services (including merchant acquirers).

PISCES

The following technical documents have been released in relation to the Private Intermittent Securities and Capital Exchange System (“PISCES”).

1. A technical consultation on a draft statutory instrument providing for exemption from Stamp Duty and SDRT for PISCES share transactions. The power to make the regulations was introduced in the Finance Act 2025, as announced at the Autumn Budget 2024.
    
2. A technical note to provide clarity on tax implications for companies and employees in relation to employees trading their shares on PISCES, in response to questions raised during an earlier consultation. The technical note includes detail on:
   • when employees acquire shares in their employer;
   • how the “readily convertible asset rules” apply;
   • how PISCES trading windows interact with the tax advantaged share schemes, Enterprise Management Incentives (“EMI”) and Company Share Option Plan (“CSOP”);
   • when capital gains tax is chargeable;
   • share valuation rules.

Other topics

Cash ISAs

Whether or not the availability of Cash ISAs – or the amounts able to be invested in Cash ISAs – would be curtailed has been a particular topic of recent press speculation. The Spring Statement contains a confirmation that the government is “looking at options for reforms to Individual Savings Accounts that 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”.

Tax policy in relation to the government’s “growth mission”

In addition, the government has announced that:

• it will be holding a series of roundtables on how tax policy supports its central growth mission, in particular in relation to the following reliefs: the Enterprise Management Incentives Scheme, the Venture Capital Trust Scheme, and the Enterprise Investment Scheme;
• it will continue to work with stakeholders to ensure that both the “four-year” regime for new arrivals in the UK, and the new residence-based inheritance tax regime (both introduced from 6 April 2025) are internationally competitive and attract talent and investment to the UK.

Climate Change Levy

The government has announced a consultation on how best to remove Climate Change Levy (“CCL”) costs from electricity used in electrolysis to produce hydrogen, and that it will conduct a wider CCL review.

Business rates

The government has confirmed that it will publish an interim report in the summer, which sets out the “direction of travel” for the business rates system, with further policy detail to follow in the Autumn Budget 2025.