Spring Statement 2025: key tax announcements from a compliance perspective

On 26 March 2025, the Chancellor, Rachel Reeves MP, delivered the Government’s Spring Statement.

Unsurprisingly, the Spring Statement was a more muted affair than the Autumn Budget in 2024, but it nonetheless contained a suite of proposals intended to target tax avoidance and maximise HMRC’s tax collection more generally. The proposals are borne out of a desire to close the ‘tax gap’; being the difference between tax receipts the Government considers it ought to be collecting, and the tax receipts it actually collects from taxpayers.  

The proposals include:

• a reward for informants “whistleblowing” scheme rewarding persons who alert HMRC to serious non-compliance in large corporates, wealthy individuals, offshore and avoidance schemes;

• a joint plan with Companies House and the Insolvency Service targeting “phoenixism” – tackling those using contrived insolvencies to evade tax and write off debts owed to others – including making directors personally liable for company taxes;

• expanding the scope of the disclosure of tax avoidance schemes (DOTAS);

• strengthening HMRC’s ability to take action against tax advisors who facilitate the non-compliance of their clients;

• an overhaul of HMRC’s approach to offshore tax non-compliance by the wealthy including recruiting experts in the private wealth management sector and utilising AI;

• the recruitment of 500 more HMRC compliance staff;

• increased late payment penalties for VAT taxpayers and income tax self-assessment taxpayers under the Making Tax Digital regime; and

• expanding HMRC’s counter-fraud capabilities to increase charging decisions by 20%.

Some have described the proposals as the toughest ever introduced and it certainly appears to be a comprehensive suite of proposals which could make a material difference to HMRC’s ability to tackle tax avoidance.

However, the effectiveness of the proposals will depend on the specifics of their design (the devil will be in the detail…), their practical implementation and whether HMRC are given the resources required to effectively utilise and enforce them. 

Watch this space – given the pressure the Chancellor is under as a result of her self-imposed fiscal rules and political pledges, the importance of closing the ‘tax gap’ through targeting tax avoidance is likely to only increase.