As promised, The Chancellor did not stray from her commitment to deliver only one major fiscal event per year, and as such, there was very little of note in terms of the any tax related announcements made during Wednesday’s Spring Statement.
There were however, several points contained within the document releases which accompany the Statement, of which we want to make you aware.
Making Tax Digital – Official confirmation has been given that those with gross ‘qualifying income’ above £20,000 from combined self-employment and rental sources will be mandated to join MTD for Income Tax from 6 April 2028. This is in addition to those with gross ‘qualifying income’ from these combined sources of over £50,000 and £30,000, already being required to adhere to the MTD for Income Tax rules from April 2026 and April 2027 respectively.
Research and Development – In another example of HMRC’s desire to crack down on excessive non-qualifying R&D claims, plans are being put in place to make advance assurance from HMRC necessary for R&D claims in the future. Whilst only a consultation at present, it’s likely that this will be another layer of compliance added to R&D claims in the future.
PISCES – The announcement of a new stock market for privately owned companies to sell shares. This could see knock-on effects in terms of both employee share schemes and also valuations of shareholdings going forward. In future, shares issued to employees in private companies which were not considered readily convertible assets, now may well be, due to there being a marketplace on which these shares can be traded, which alters the manner in which the issue of any such shares are taxed. More detail is expected in the coming months on the platform’s development.
Cash ISAs – Whilst no announcement has been made, wording released by HMRC offers a subtle hint that the rumoured restriction on ISAs that many expected within the Spring Statement (from £20,000 per year to £4,000 per year) may only have been delayed rather than forgotten. You may wish to consider seeking advice in relation to maximising ISA contributions while the larger limit is available.
Whilst many were hoping that The Chancellor may have backtracked on some measures announced in the Autumn Budget, despite the widespread outcry that followed the Budget, she has resisted the pressure to do so. Therefore, the following measures will be implemented as planned:
Employer’s National Insurance – The rise of 1.2% to 15% from 6 April 2025, along with the reduction in secondary threshold (the amount an employer can pay per employee, before becoming liable to Employer NI) from £9,100 to £5,000.
Inheritance Tax – As was well publicised, the Inheritance Tax relief on both businesses and agricultural property has been cut significantly. These changes kick in from 6 April 2026, at which point the 100% relief associated with such assets will be cut to 50% for all but the first £1m held.
Furnished Holiday Lets – The FHL regime will end as planned, and all properties will be treated as if ‘ordinary’ rental properties from 6 April 2025. The biggest effect of this change is arguably that any mortgage interest will become restricted for higher rate tax payers in the same way as on other rental properties, along with restrictions on how to split profits from the property between partners.
Don’t hesitate to get in touch with us, to discuss possible ways to help mitigate some of these tax increases going forward.
George Hardey
Director & Head of Tax
george.hardey@waltonsba.co.uk
Paul Buckley
Associate & Senior Tax Manager
paul.buckley@waltonsba.co.uk
Ben Bramwell
Assistant Tax Manager
ben.bramwell@waltonsba.co.uk
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