The Spring Statement has passed with no ‘changes to taxes’. While this statement is true, some ‘taxing’ changes have still been announced in the background.
Making Tax Digital (MTD)
MTD for VAT has been in place for a while and is now fast-approaching for Income Tax (April 2026). At the Autumn Budget, Rachel Reeves announced that she would extend the scope for MTD for Income Tax Self-Assessment (ITSA) and we now have the detail on that. It confirms that from April 2028, taxpayers with turnover in excess of £20,000 will be required to report under MTD, in addition to those with turnover in excess of £50,000 from April 2026 and £30,000 from April 2027.
Confirmation has also been given for those who can be exempted, which includes those:
- with power of attorney in place;
- non-UK resident foreign entertainers and sportspeople who have no other relevant reportable income;
- digitally excluded customers;
- ministers of religion;
- Lloyd’s underwriters; and
- Recipients of married couples’ allowances and/or blind persons allowance.
MTD Penalties
Penalties for late payment of tax for MTD customers will be increased from April 2025 to:
- 3% after 15 days;
- A further 3% from 30 days; and
- 10% per annum after 31 days or more.
National Insurance
A benefit for smaller employers is the increased compensation rate, from April 2025, from 103% to 108.5% for parental leave. This is meant to counter the increased national insurance rates announced in the Autumn Budget.
High-Income Child Benefit Charge
Finally some good news for those individuals who may have unwittingly or intentionally retained the child benefit, whilst falling foul of the £60,000 income limit. From Summer 2025, it will be possible, via HMRCs app, to request the tax charge to be collected through PAYE, rather than being required to file a Self Assessment Tax Return, which will be welcome news for many.
Consultations
As with other announcements, there are a number of consultations being looked at, including the better use of third-party data for tax calculation purposes, reforming penalties, new ways to target promoters of tax avoidance, and expanding powers against rogue tax agents.
In support of these proposals, HMRC is aiming to increase its headcount by 600 staff within debt collection and 500 in compliance, thereby aiming to maximise cash collection.
Existing announcements
As was known, SDLT residential property rates are returning to pre-budget levels from Monday and I’m sure our conveyancing colleagues will be glad of the rest!
There was no mention of Business Property Relief or Agricultural Property Relief so heavily covered in the Budget and no announcement on the pension consultation. Both areas have been heavily criticised for their potentially significant impact on inherited estates.
We await updates…
As the new tax year approaches, Lambert Chapman LLP continue to be available to discuss changes in your circumstances and how Governmental proposals might affect you, now and the in the future. Please do get in touch with us to arrange a call or meeting.
Disclaimer
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.