Spring Budget 2025: Key Updates
Posted on 27th March 2025 at 18:23
In the latest Spring Budget, Chancellor Rachel Reeves unveiled a suite of reforms aimed at tightening HMRC’s grip on tax evasion and avoidance. With a clear focus on boosting compliance and modernising the UK’s tax system, these changes are expected to impact a broad range of taxpayers — property investors included.
More Compliance Officers at HMRC
Building on last year’s Autumn Budget, which promised 5,000 new HMRC compliance roles, the government will now recruit a further 500 officers. This expanded team is expected to help recover an additional £1 billion in tax revenue over the next four years — a clear signal that enforcement activity will continue to ramp up.
Higher Penalties for Late Filing
From April 2025, penalties for missing deadlines on Self-Assessment and VAT returns will increase. Fines currently set at 2–4% will rise to between 3–10%, depending on the circumstances. This is part of the government’s effort to reduce the £40 billion tax gap — and late-paying landlords and developers may find themselves facing steeper costs if they fall behind.
Whistleblower Incentives Introduced
Later this year, a new reward scheme for whistleblowers will launch, encouraging individuals to report significant cases of non-compliance. The scheme will focus on large businesses, wealthy individuals, offshore arrangements, and avoidance schemes — including those that may appeal to high-net-worth property investors. Rewards will be based on a percentage of tax recovered through the information provided.
Tougher Stance on Tax Avoidance Promoters
The Treasury is also considering new legislation aimed at disrupting tax avoidance schemes at the source. Proposals under review include expanding HMRC’s powers to penalise promoters and dismantle the structures that allow such schemes to operate. This will be of particular relevance to those involved in complex property investment vehicles or marketed planning strategies.
Digital Tax Reporting Moves Ahead
The phased introduction of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) will continue. From April 2028, landlords and sole traders with qualifying income above £20,000 will be required to join the digital reporting system. This initiative is designed to simplify tax reporting and reduce errors — but will also require adjustments to how many landlords manage their tax obligations.
In Summary
The Spring Budget 2025 sends a clear message: greater enforcement, sharper penalties, and a modernised approach to tax administration are on the horizon. For property investors, now is the time to ensure your portfolio is structured correctly, your reporting is watertight, and you’re staying ahead of new compliance requirements.
Concerned About What This Means for You?
Whether you're unsure how the new penalties may affect your portfolio, or you're reviewing your reporting process ahead of MTD, we're here to help. Contact our specialist team at Property Tax Advice to get clear, practical guidance tailored to your property business.
01249 816 810
info@property-tax-advice.co.uk
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