The taxman is coming
The Chancellor wants to raise an additional £1 billion per year by 2029-30 by better equipping HMRC to do its job, and has committed an additional £300 million investment in HMRC over the course of the next five years. The Government is investing in HMRC's debt management capacity, including a pilot scheme to collect more aged debts, moving towards automated debt recovery as well as recruiting 600 debt management staff.
The Chancellor has also announced a further 500 additional HMRC compliance staff, building on the 5,000 new recruits announced at the Budget in the autumn. Clearly recruitment and training will take time and the Government may not see the results form the new recruits until much later in the Parliamentary term. The main message is that if you owe tax, pay the correct amount or HMRC will come knocking.
With the aim of tighter compliance to raise additional revenue, HMRC has published a number of consultations that will:
- review the data HMRC acquires from third parties, particularly financial institutions and providers of card acquiring services, in addressing tax compliance;
- reform tax penalties for non-compliance and failure to notify HMRC;
- introduce new measures to tackle promoters of tax avoidance; and
- increase HMRC's powers to address tax advisers facilitating non-compliance.
The Government also reiterated its commitment to cracking down on tax fraud, announcing it will increase its target for criminal charging decisions from 500 to 600 per year by 2029-30. The Chancellor also confirmed that a new reward scheme for informants would be launched later in 2025. This scheme will focus on targeting non-compliance in large corporates, wealthy individuals, offshore and avoidance schemes. The Government has committed to an additional 400 staff to specifically address offshore non-compliance.
In the summer, the Government will publish plans to transform and simplify the tax and customs systems with the aim of reducing administrative burdens on businesses.
Other consultations published alongside the Spring Statement include:
- a proposal to widen the use of advance clearances in research and development relief claims to reduce error and fraud; and
- a draft statutory instrument that provides exemption from stamp duty and stamp duty reserve tax for transfers of shares on Private Intermittent Securities and Capital Exchange System (PISCES), a new secondary trading platform that will allow for the intermittent trading of private company shares. A technical note has also been published on the tax implications for companies and employees in relation to employees trading their shares on PISCES.
The Government's efforts to close the tax gap will take time, as HMRC will need to build new systems, train new staff and allow time for the consultation process. For businesses and individuals, the clear message for the next five years is that compliance with your tax obligations is critical. Navigating UK's tax code can be complex but the consequences of getting it wrong are costly.
Should you wish to discuss any tax aspect of the Spring Statement or tax compliance more generally, please speak to one of our Tax team.
