Chancellor Rachel Reeves delivered the UK’s Spring Statement on 26 March 2025, unveiling a series of reforms aimed at stabilising the economy, improving public finances, and modernising the tax system. For individuals, landlords, and businesses alike, the changes introduced will have practical implications—particularly when it comes to tax reporting and compliance.
At HJ Accountants, we’ve broken down the key announcements and what they mean for you.
Making Tax Digital: Major Expansion Ahead
The government’s push toward a fully digital tax system continues, with a phased expansion of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA).
From April 2026, MTD will apply to self-employed individuals and landlords with annual income over £50,000.
By April 2027, this will extend to those earning over £30,000.
From April 2028, anyone with income exceeding £20,000 will also need to comply.
MTD requires affected taxpayers to keep digital records and submit quarterly updates to HMRC using approved software. This is a significant change from the current annual filing model and could mean more admin and tighter deadlines for many individuals and small businesses.
What Should You Do Now?
Start planning early. Transitioning to digital record-keeping takes time and the right systems. At HJ Accountants, we help clients make a smooth switch to MTD compliance—without the stress.
New Penalties for Late Payments
A new penalty regime for late payment of VAT and Income Tax Self Assessment will come into effect from April 2025. The new structure includes:
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A 3% penalty if payment is 15 days overdue
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An additional 3% if overdue by 30 days
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Daily interest charges at 10% per annum from day 31 onwards
These changes are designed to discourage late payments and bring outstanding tax liabilities under control more quickly. The message from HMRC is clear: on-time payment is a priority.
If you’ve previously struggled with deadlines or need help improving your cash flow to stay compliant, now is the time to seek advice.
Tougher Rules on Company Closures
HMRC, Companies House, and the Insolvency Service are teaming up to tackle a practice known as ‘Phoenixism’, where directors close a company only to reopen a similar one under a new name to avoid tax or liabilities.
The crackdown will increase scrutiny on company closures, and in some cases, directors may become personally liable for unpaid taxes.
If you’re planning to wind down a business or restructure, professional guidance is more important than ever. Poor handling of company closure could now have serious financial consequences.
Simplified Child Benefit Repayment for High Earners
From Summer 2025, individuals who are required to pay the High Income Child Benefit Charge (HICBC) but do not normally file a tax return will benefit from a simplified process.
A new digital PAYE portal will allow employees and company directors to pay the charge without completing a full Self Assessment, unless they are also self-employed.
This should ease the administrative burden for higher earners and streamline the process, especially for those whose only reason for filing was to repay this charge.
What It All Means
The Spring Statement 2025 clearly signals the government’s commitment to a more modern, transparent, and efficient tax system. While some changes will make life simpler, others will require proactive steps and careful compliance.
Whether you’re a landlord navigating digital tax submissions, a business owner facing tighter deadlines, or a director managing a company restructure, it’s crucial to stay ahead of these changes.
Need Help Navigating the Changes?
At HJ Accountants, we pride ourselves on providing practical, jargon-free advice to help individuals and businesses stay compliant and financially healthy. Our experienced team can help you understand how the Spring Statement affects you—and guide you through what to do next.
Get in touch today to book a consultation and make sure you’re fully prepared for 2025 and beyond.
Call us on 0191 251 7599 to speak with one of our expert advisors.