Spring Statement 2025: Tax & Pension Updates

From the start of her Spring Statement 2025, Chancellor Rachel Reeves made clear that she had no tax cuts or increases to announce.

Instead, she explained how the UK's growth forecast had been halved, forcing her to make deeper cuts to plug the hole in Britain's finances.

She blamed global economic uncertainty - widely read as a euphemism for US President Donald Trump and his trade wars - for the revision, which took expected GDP growth from 2% to a measly 1%.

However, she pledged that increasing employer national insurance and cutting or freezing welfare benefits would help balance the books by 2030 and give the treasury £10 billion headroom rather than a £4 billion deficit.

Part of her campaign to make government more efficient is to invest more in HM Revenue & Customs to tackle tax avoidance.

HMRC net closes on tax dodgers

Besides spending more on cutting-edge software and taking on 1,100 new debt recovery and compliance staff, HMRC will have significantly more powers to deal with rogue tax advisers who help their clients avoid paying taxes.

HMRC says: "The government is seeking views on new measures to close in on promoters of tax avoidance. These include proposals that would give HMRC additional powers and stronger sanctions, allowing HMRC to disrupt the business model promoters rely on more efficiently and effectively.

"The government intends to make a step change in efforts to close in on the small number of remaining promoters of tax avoidance. This would contribute to closing the tax gap attributable to marketed tax avoidance."

The consultation Closing in on promoters of marketed tax avoidance closes on June 18.

Late tax filing penalties to rise

A separate consultation looks at how to crack down on rogue tax advisers by giving HMRC more powers to gather evidence and publish details of sanctions and other penalties.

The consultation Enhancing HMRC's ability to tackle tax advisers facilitating non-compliance closes on May 7.

In other documents published in the Chancellor's Spring Statement speech, a technical note outlines how Making Tax Digital (MTD) will work for sole traders and landlords with incomes over £20,000 starting from April 2028.

The Chancellor also revealed that self-assessment late filing penalties will increase as landlords are enrolled in MTD.

The consultation Reform of behavioural penalties asks how penalties can change while remaining an effective deterrent to tax avoidance.

The consultation ends on June 18.

State pension age warning

Meanwhile, the Department of Work and Pensions reminds anyone born between April 6, 1960 and April 5, 1977, that their State Pension Age increases from 66 to 67 years old.

The change impacts the retirement plans of millions, who will also see the age at which they can access their pensions rise from 57 to 58.