Spring Statement 26 March 2025 - tax anti-avoidance measures

Despite some speculation that Spring Statement might introduce new tax measures, we are pleased to confirm that no changes to the tax rules have been made, and as initially planned, the Spring Statement does not affect our current tax regulations.

However, the Government has used this opportunity to release a range of consultation documents, particularly focusing on tax anti-avoidance measures. These consultations may be of interest to some of our clients, and we have outlined the key points below.

Making Tax Digital

From April 2026, Making Tax Digital (MTD) will extend to certain taxpayers for Income Tax purposes, marking the first expansion of the MTD system since its introduction for VAT-registered businesses in April 2022. Under the new rules, certain taxpayers will be required to maintain digital records and submit quarterly updates to HMRC using compatible software. This will apply to:

• April 2026: Taxpayers with qualifying income over £50,000.
• April 2027: Taxpayers with qualifying income over £30,000.
• April 2028: Taxpayers with qualifying income over £20,000.

“Qualifying income” refers to the combined gross income (before deducting expenses) from these sources, as reported on the previous year's tax return.

Advance Tax Certainty for Major Projects

The Government is consulting on a new process designed to offer enhanced tax certainty for major investment projects, particularly large-scale and complex projects. The consultation proposes a tailored service that would offer statutory certainty on how tax rules would be applied if a project proceeds as planned. This initiative aims to help projects better estimate tax impacts on returns and invest with greater confidence. The consultation is open until 17 June 2025.

Research and Development (R&D) Tax Relief Advance Clearances

A consultation has been launched to enhance the existing voluntary R&D “advance assurance” process, which allows certain businesses to gain assurance from HMRC that their R&D tax relief claims will not be subject to enquiry for three years. This process, which is currently underutilised, could be improved to increase awareness and uptake. The consultation period is from 26 March to 26 May 2025.

Better use of Third Party Data

HMRC has published a consultation to explore ways to improve customer service by using third-party data more effectively. The proposed changes include using interest income and card sales data to pre-populate tax returns and check that income reported aligns with third-party data. The consultation, which runs until 21 May 2025, aims to modernize the tax system, although its impact on service levels remains to be seen.

Tax Implications for Companies and Employees Trading Shares on PISCES

A new secondary trading platform, PISCES, is being introduced for intermittent trading of private company shares, with applications including employment share incentive schemes. HMRC has provided guidance on how PISCES trading events will interact with share transactions such as employment-related securities and enterprise management incentives. A consultation on the exemption from Stamp Duty and Stamp Duty Reserve Tax (SDRT) for transactions on PISCES is open until 23 April 2025.

Behavioural Penalties Reform

A consultation is underway to review potential reforms to the penalty system for inaccuracies and failure to notify. The goal is to simplify and clarify how penalties are calculated, with feedback from this consultation to help shape future reforms. The consultation is open until 7 May 2025.

Tackling Tax Advisers Facilitating Non-Compliance

HMRC is seeking views on strengthening its powers and sanctions against tax advisers who facilitate non-compliance. Proposed measures include enhanced investigation powers, tougher financial penalties, and greater transparency about sanctions. The consultation will run until 7 May 2025.

Crackdown on Promoters of Tax Avoidance

The Government is also consulting on stronger measures to counteract promoters of tax avoidance schemes, including proposals to expand the Disclosure of Tax Avoidance Schemes (DOTAS) regime, issue Stop Notices to disrupt promoters, and enhance information powers, particularly targeting legal professionals. The consultation is open until 18 June 2025.

We encourage you to review these consultations if they are relevant to your business.