The Chancellor of the Exchequer delivered her Spring Statement 2025 to Parliament on 26 March, vowing to bring about a ‘new era of security and national renewal’, with aims to kickstart economic growth, protect working people and keep Britain safe.
Summary of the tax related changes:
Key changes previously announced (see Autumn Budget 2024 for further details):
- Tax thresholds frozen until 2028
- Inheritance tax threshold frozen until 2030
- Stamp Duty Land Tax increases from 1 April 2025
- National Living Wage rises in April 2025 to £12.21 per hour
- Employers’ NIC increases by 1.2% to 15% from April 2025
- Business Asset Disposal Relief rates increases to 14% from April 2025
- Non-domicile regime abolished from April 2025 with a new residence scheme introduced
- VAT on school fees from January 2025
- Furnished Holiday Lets abolished from April 2025
Spring Statement 2025 key measures announced:
- New investment in HMRC’s technology to crack down on tax evasion
- From Summer 2025 the High-Income Child Benefit Charge (HICBC) can be paid by employed parents through PAYE, removing the need to register for Self-Assessment
- The government will increase the Universal Credit standard allowance for new and existing claims above inflation from 2026?27. This means the standard allowance weekly rate for a single person aged 25 and over will increase from £92 in 2025?26 to £106 in 2029?30.
- The Universal Credit health element will be frozen for existing claimants until 2029?30, and for new claims, the Universal Credit health element will be reduced to £50 a week in 2026?27 and then frozen until 2029?30.
- Making Tax Digital (MTD) – The government will expand the rollout of MTD for income tax Self-Assessment to sole traders and landlords with incomes over £20,000 from April 2028.
- Increasing late payment penalties – The government 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.
If you have any queries or would like to discuss how any of the above changes affect you, please get in touch.