Spring Statement 2025: What It Means for You (And Your Wallet)

The Chancellor’s Spring Statement 2025 has landed, and while the headlines focused on defence and civil service reform, there were some sneaky little tax and business updates that you really need to know about.

As accountants, here’s what stood out — and what you should be thinking about next.

Tax and Compliance: HMRC Gets More Teeth

This Spring Statement sends a strong message: closing the tax gap is high on the government's agenda. The government is pumping £300 million into HMRC’s compliance and debt collection teams, which means they’ll have more people, more power, and more patience to chase unpaid tax.

Key Takeaways:

• 600 new HMRC debt management staff and 500 additional compliance officers – great news for them, not so great for anyone behind on payments.

• Direct recovery of tax debts is back– HMRC can now grab what’s owed straight from your bank account (yes, really).

• Increased late payment penalties, including:

  • 3% of unpaid tax after 15 days

  • An additional 3% after 30 days

  • A rolling 10% per year for tax overdue beyond 31 days

What it means for you:

Whether you’re a sole trader, landlord, or small company director, staying on top of your tax payments has never been more critical. With higher penalties and more staff chasing unpaid debts, the cost of getting it wrong (or ignoring it) is going up fast.

📌 Accountant’s Tip:

Set up automated payments or calendar reminders. Or better yet, get an accountant to handle it – we live for this stuff.

Cash for Tips: HMRC's New Rewards for Informants

Here’s one for the office gossip: the Spring Statement confirmed that HMRC will increase rewards for informants— people who report tax fraud or non-compliance.

This is part of a wider effort to close the tax gap by leveraging insider knowledge — whether it’s a disgruntled employee, ex-business partner, or someone else with information.

What it means for you:

The risk of being reported is increasing. If you’re cutting corners on tax (deliberately or otherwise), the odds of being caught are going up — and someone might get paid to report you.

📌 Accountant’s Tip:

Make sure your books are clean. Even small errors or grey areas could get flagged. If you've made past mistakes, a voluntary disclosure is safer than waiting for a knock on the door.

Making Tax Digital (MTD): Expansion Continues

MTD for Income Tax Self Assessment (ITSA) is expanding to sole traders and landlords with income over £20,000 from April 2028. While that feels far off, the prep work should start now — especially if you're still managing your accounts on spreadsheets or paper.

What it means for you:

No more paper receipts in shoeboxes. No more Excel spreadsheets last updated in 2017. MTD means real-time reporting, stricter record-keeping, and fewer chances to "guestimate" expenses.

📌 Accountant’s Tip:

If you're not using accounting software, this is your nudge. Look for MTD-compatible software (like QuickBooks) and begin familiarising yourself with it now.

HMRC is Coming for Dodgy Tax Advisors- and That's a Good Thing

Ever heard a tax adviser promise huge savings with a "totally legal" loophole? Turns out HMRC has, too – and they’re not impressed. The government is cracking down on dodgy tax schemes and the people pushing them.

What it means for you:

This is a win for clients who rely on honest, transparent advice. But it’s also a reminder to double-check your adviser’s credentials. If it sounds too good to be true, it probably is.

📌 Accountant’s Tip:

Work with qualified accountants. If someone promises you the tax equivalent of free money, run.

Business Support and Investment

If you’re in property, construction, or training, there’s funding and opportunities coming your way:

• £2 billion set aside for affordable housing in 2026–27

• Up to 18,000 homes to be developed

• £625 million for construction skills training

  
  

What it means for you:

There should be more opportunities to bid on housing projects, especially if you’re a contractor or supplier. Funding for construction skills may also benefit training providers and those offering, or looking for, apprenticeships.

📌 Accountant’s Tip:

Update your financial records, sort out any outstanding tax issues, and be ready to prove you’re a solid investment.

Universal Credit Changes:

Big changes are coming to Universal Credit, including:

• A freeze on the health element for existing claimants

• Above-inflation increases to the standard allowance (from 2026)

• 500+ new staff hired to investigate welfare fraud

  
  

What it means for you:

This isn’t just about benefits – it signals more data-sharing between HMRC, DWP, and other government departments. If you’ve got undeclared income (even a side hustle), expect more checks and potential delays.

📌 Accountant’s Tip:

Report everything correctly. Even if you think HMRC won’t notice that little extra income, they probably will.

Final Thoughts

The Spring Statement wasn’t packed with many changes, but it made one thing clear- HMRC is stepping up its game.

Here’s what you should do:

✅ Stay compliant– HMRC is hiring more people to catch mistakes. Don’t give them a reason to look your way.

✅ Go digital– Making Tax Digital is creeping closer. Get ahead before the deadline.

✅ Keep an eye on funding– If you’re in construction, tech, or training, opportunities are coming. Make sure you’re ready to apply.

Got questions? Not sure how these changes affect you? Now’s the time to chat with your accountant (before HMRC decides to do it for you).