Well ,the Spring Statement has been and gone, so we felt it was worth giving you a few words on what matters to you, the small business owner.
As this happened a week or so ago, you might have come to the conclusion that there was no exciting (or damaging!) tax changes announced. And you would be right!
Herein lies the ‘good’ news – there was no news!
However, delve a little deeper, and some interesting things emerge…
The Tax Gap
The government is looking to continue to crack down and collect more tax on what it calls ‘the Tax Gap’ . The aim is to collect an extra £1billion per year, and the government plans to achieve this include:
New approach to old tax debt
HMRC is set to receive £4million in new funding to pilot a new programme with the private sector. This is to improve the tax collection agency’s approach to collecting older unpaid tax debt.
More staff
An additional 600 staff are to be recruited into HMRC’s debt management teams and work with the private sector to make collecting tax debt more efficient. The aim is that for every £1 spent on these staff, over £13 of debt is expected to be recovered.
More money for more staff
An additional £100m in new funding is allocated for HMRC to recruit a further 500 compliance officers from April 2025. This initiative aims to raise £241m in unpaid tax over the next five years.
Higher late payment penalties
From April 2025, late payment penalties for VAT and making tax digital for income tax self-assessment will increase as follows:
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- From 2% to 3% at 15 days
- From 2% to 3% at 30 days
And
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- From 4% to 10% from day 31 onwards
This aim is to incentivising taxpayers to pay on time.
Making Tax Digital
Making Tax Digital for income tax self-assessment (the new scheme for multiple, ‘in year’ digital tax returns) will be extended to sole traders and landlords with income over £20,000 from April 2028. This builds on the existing plan to include sole traders and landlords with income above £50,000 from April 2026, and those with income above £30,000 from April 2027.
Child Benefits
It was confirmed that claimants of Child Benefit or their partners (but only where individuals are newly liable for the HICBC) will be able pay the charge via PAYE, without the need to submit a self-assessment tax return. The High Income Child Benefit Charge (HICBC) PAYE digital service will be accessible via the HMRC app from summer 2025. Good news if you are only doing a tax return because of this charge!
Timely help from Heelan and Associates
Now the dust has settled a little in the Spring Statement, you may have some queries which your current accountant may not be able to answer.
Our paid for 1 hour, 1-2-1 consultation is ideal if you have some straightforward questions. You don’t have to become a client, so it’s an easy and stress-free way to get the help you need, when you need it.