Shorter Reads

2025 Spring Statement

The latest Spring Statement signals a continued push to close the tax gap, with HMRC gaining greater authority over data collection, tax enforcement, and adviser regulation. While additional investment in compliance is promised, concerns remain over privacy, fairness in penalties, and the effectiveness of these measures. Explore our key takeaways and expert insights.

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Published 3 April 2025

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  • Financial services

Overall Comment on the Spring Statement

The Spring Statement reflects the Government’s continued focus on “closing the tax gap” through increased HMRC powers and enforcement activity.  Many of the measures announced feel like an extension of existing policies rather than transformative new initiatives. The promised simplification of tax and customs remains vague, and while additional HMRC funding is welcome, its effectiveness is uncertain. The shift towards direct data reporting does raise privacy concerns, and lawyers and other tax professionals should stay vigilant against potential overreach by HMRC.  At least, after the Government’s pointed failure to consult properly on several headline measures announced in the Autumn Budget (e.g., APR/BPR), it is welcome that they will be doing so for four of the most significant new powers published with the Spring Statement.

Key Conclusions & Quotes

Expansion of HMRC’s Data Gathering Powers

  • The proposed extension of HMRC’s “bulk data gathering powers” suggests a shift towards direct taxpayer reporting by financial institutions, raising significant concerns about government oversight.
  • “If implemented, Big Brother really will be watching!”

Reform of Behavioural Penalties

  • Changes to HMRC’s approach to behavioural penalties could significantly impact taxpayers facing penalty appeals, particularly where innocent errors are unfairly classified as “carelessness.”
  • “There are issues with the way HMRC seeks to levy conduct-based penalties on what really ought to be considered cases of innocent error.”

Investment in Tackling the Tax Gap

  • While additional investment in HMRC aims to raise £1bn in tax revenue, the effectiveness of such measures remains uncertain, with diminishing returns on anti-avoidance efforts.
  • “Returns on investment in anti-avoidance expenditure are becoming smaller.”

Increase in HMRC Staff for Offshore Tax Compliance

  • The announcement of 400 additional staff to tackle offshore non-compliance lacks clarity on their recruitment, expertise, or impact.
  • “There are no details about where those people are to come from, or whether they will have the necessary skills to be effective.”

Promise of Tax and Customs Simplification

  • While a “transformation roadmap” is set for publication, meaningful tax reform is unlikely given the complexity and political challenges involved.
  • “We’ll wait and see how transformative it really turns out to be – not much, is my rather jaded prediction.”

Crackdown on Promoters of Tax Avoidance Schemes

  • Despite the declining impact of marketed avoidance schemes, the Government remains committed to stamping them out entirely, now targeting legal professionals involved in their design. I infer they really mean barristers, whom the Bar Standards Board still steadfastly refuses to sanction for enabling aggressive tax schemes, notwithstanding several high-profile and damaging scandals.  A small number of senior barristers are known to have profited handsomely from advising on the design of such schemes over many years; meanwhile, solicitors have already been warned that aiding abusive schemes is a serious disciplinary matter that could lead to regulatory sanctions or even prosecution.
  • “There is a small handful of dinosaurs still developing and marketing new tax schemes, not recognising that the world has changed around them.  The sooner they are stopped the better.”

Enhancing HMRC’s Powers Over Tax Advisers

  • While targeting disreputable advisers is necessary, the legal profession should monitor this closely to ensure HMRC does not overreach its authority.
  • “As the House of Lords Economic Affairs Committee warned in 2020, Governments and executive agencies such as HMRC can become addicted to their own power, endlessly seeking to increase it.”

 

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Shorter Reads

2025 Spring Statement

The latest Spring Statement signals a continued push to close the tax gap, with HMRC gaining greater authority over data collection, tax enforcement, and adviser regulation. While additional investment in compliance is promised, concerns remain over privacy, fairness in penalties, and the effectiveness of these measures. Explore our key takeaways and expert insights.

Published 3 April 2025

Associated sectors / services

  • International trusts, tax and estate planning
  • Tax & Estate Planning
  • Tax disputes & investigations
  • Trust & Estates Disputes
  • Trusts
  • UK trusts, tax and estate planning
  • UK/USA tax & estate planning
  • Financial services

Authors

Overall Comment on the Spring Statement

The Spring Statement reflects the Government’s continued focus on “closing the tax gap” through increased HMRC powers and enforcement activity.  Many of the measures announced feel like an extension of existing policies rather than transformative new initiatives. The promised simplification of tax and customs remains vague, and while additional HMRC funding is welcome, its effectiveness is uncertain. The shift towards direct data reporting does raise privacy concerns, and lawyers and other tax professionals should stay vigilant against potential overreach by HMRC.  At least, after the Government’s pointed failure to consult properly on several headline measures announced in the Autumn Budget (e.g., APR/BPR), it is welcome that they will be doing so for four of the most significant new powers published with the Spring Statement.

Key Conclusions & Quotes

Expansion of HMRC’s Data Gathering Powers

  • The proposed extension of HMRC’s “bulk data gathering powers” suggests a shift towards direct taxpayer reporting by financial institutions, raising significant concerns about government oversight.
  • “If implemented, Big Brother really will be watching!”

Reform of Behavioural Penalties

  • Changes to HMRC’s approach to behavioural penalties could significantly impact taxpayers facing penalty appeals, particularly where innocent errors are unfairly classified as “carelessness.”
  • “There are issues with the way HMRC seeks to levy conduct-based penalties on what really ought to be considered cases of innocent error.”

Investment in Tackling the Tax Gap

  • While additional investment in HMRC aims to raise £1bn in tax revenue, the effectiveness of such measures remains uncertain, with diminishing returns on anti-avoidance efforts.
  • “Returns on investment in anti-avoidance expenditure are becoming smaller.”

Increase in HMRC Staff for Offshore Tax Compliance

  • The announcement of 400 additional staff to tackle offshore non-compliance lacks clarity on their recruitment, expertise, or impact.
  • “There are no details about where those people are to come from, or whether they will have the necessary skills to be effective.”

Promise of Tax and Customs Simplification

  • While a “transformation roadmap” is set for publication, meaningful tax reform is unlikely given the complexity and political challenges involved.
  • “We’ll wait and see how transformative it really turns out to be – not much, is my rather jaded prediction.”

Crackdown on Promoters of Tax Avoidance Schemes

  • Despite the declining impact of marketed avoidance schemes, the Government remains committed to stamping them out entirely, now targeting legal professionals involved in their design. I infer they really mean barristers, whom the Bar Standards Board still steadfastly refuses to sanction for enabling aggressive tax schemes, notwithstanding several high-profile and damaging scandals.  A small number of senior barristers are known to have profited handsomely from advising on the design of such schemes over many years; meanwhile, solicitors have already been warned that aiding abusive schemes is a serious disciplinary matter that could lead to regulatory sanctions or even prosecution.
  • “There is a small handful of dinosaurs still developing and marketing new tax schemes, not recognising that the world has changed around them.  The sooner they are stopped the better.”

Enhancing HMRC’s Powers Over Tax Advisers

  • While targeting disreputable advisers is necessary, the legal profession should monitor this closely to ensure HMRC does not overreach its authority.
  • “As the House of Lords Economic Affairs Committee warned in 2020, Governments and executive agencies such as HMRC can become addicted to their own power, endlessly seeking to increase it.”

 

Associated sectors / services

  • International trusts, tax and estate planning
  • Tax & Estate Planning
  • Tax disputes & investigations
  • Trust & Estates Disputes
  • Trusts
  • UK trusts, tax and estate planning
  • UK/USA tax & estate planning
  • Financial services

Authors

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