BY BDO UK
Rachel Reeves delivered a Spring Forecast that focused heavily on cuts to welfare spending to meet the fiscal rules and fund additional spend on high-tech defence. The Chancellor kept her promise to avoid any further tax increases, but tax evasion is back in the spotlight. This was a statement focused on stability and forward-planning, rather than any immediate changes.
The key points are:
– Economic growth predicted to be 1% in 2025, 1.9% in 2026, 1.8% in 2027, 1.7% in 2028, and 1.8% in 2029
– More crackdowns on tax evasion predicted to increase the tax take by a further £1 billion a year by 2030
– Late payment penalties will increase for Making Tax Digital from April 2025
– Defence spending will be increased by £2.2 billion this financial year, moving towards the full 2.5% of GDP target
– A £400m ringfenced ‘defence innovation budget’ will be created, offering significant opportunities for technology and manufacturing businesses
– Extra funding for affordable housing, with training funds for construction industry workers.
A set of government consultations have also been published today, indicating possible changes to the below areas:
– R&D Tax Relief advance clearances
– Better use of new and improved third party data
– Behavioural penalties reform
– Stamp Duty Tax changes for PISCES transactions
– Enhancing HMRC’s ability to tackle tax advisors facilitating non-compliance
– Closing in on promoters of tax avoidance.
More detail on these consultations will be available soon on https://lnkd.in/ehauhzn
