UK Spring Statement 2025: what business tax measures were announced?

The UK chancellor, Rachel Reeves, delivered her spring statement on 26 March 2025, accompanied by an economic and fiscal forecast from the Office of Budget Responsibility. As anticipated, and in keeping with the chancellor's pledge to have one major fiscal event each year (the autumn budget), the spring statement focused on welfare and spending cuts, not tax rises, to help stabilise the government's finances.

While no tax rises were announced, two overarching themes came out of the supporting tax documentation and consultations that were published alongside the statement: measures to close the tax gap and encourage economic growth.

Closing the tax gap

The government acknowledged that a crucial part of restoring economic stability and fiscal responsibility is closing the tax gap. A raft of measures was announced (many of which build upon the plans set out in the autumn budget). These are expected to raise over £1 billion per year by 2029-30 and include:

• Investing in HMRC’s debt management capacity, recruiting 500 more HMRC compliance staff (on top of the 5,000 previously announced) and extending the rollout of HMRC's "Making Tax Digital" (MTD) (which places UK businesses on a digital footing) to include a wider range of smaller businesses. These measures should ensure more individuals and businesses pay the taxes they owe and making it easier for taxpayers to pay the right tax.
• Increasing late payment penalties for VAT taxpayers and income tax self-assessment taxpayers from April 2025 as they join MTD. This will be from 2% to 3% at 15 days, 2% to 3% at 30 days, and 4% to 10% from day 31. Alongside this a consultation was published on the reform of behavioural penalties to encourage better compliance.
• Expanding HMRC's counter-fraud capability to prosecute more tax fraudsters and to allow additional criminal investigations to focus on delivering a strong deterrent. This includes targeting "fraud facilitated by those in large corporations", which echoes the Labour Party's previous announcements regarding the Criminal Finances Act 2017 which introduced corporate criminal offences for failing to prevent the facilitation of tax evasion.
• Introducing a US-style whistleblower scheme for "serious non-compliance".
• Tackling “phoenixism” (whereby directors use contrived insolvencies to evade tax and write off debts owed to others). These plans (being delivered jointly by HMRC, Companies House and the Insolvency Service) include increasing the use of upfront payment demands, making more directors personally liable for company taxes, and increasing the number of enforcement sanctions.
• Recruiting specialists in private sector wealth management and utilising AI to catch individuals attempting to conceal their wealth, regardless of where they attempt to hide it.
• Tackling tax advisers who facilitate non-compliance in their client’s tax affairs. A consultation was published which will run until 7 May 2025.
• Closing in on promoters and enablers of tax avoidance schemes which includes seeking views (in its consultation) on new proposals on expanding the scope of the Disclosure of Tax Avoidance Schemes (DOTAS) regime. It will run until 18 June 2025.
• Improving the quality of specific data required under HMRC's data-gathering powers from financial institutions and providers of card acquiring services. A consultation has been launched which will run until 21 May 2025.

Plans for growth

Several consultations were published alongside the statement, some of which were first trailed in the Corporate Tax Roadmap published at the autumn budget and which aim to give greater certainty for businesses around the tax rules.

Research and development tax relief advance clearances

This consultation (which is open until 26 May 2025) seeks views on the options for a revised system of clearances that will aim to reduce error and fraud in the R&D reliefs and provide certainty to businesses.

Advance clearance for investors on taxation of investment in major projects

The consultation, which will run until 17 June 2025, proposes a voluntary route for corporate entities who undertake major investment projects to seek advance certainty over how the tax rules will be applied to the project if it proceeds as outlined in the clearance. The consultation proposes that Corporation Tax will be the core tax on which investors can seek advance certainty, but the government is open to exploring the case for expanding the process to other taxes.

Only the "largest and most significant projects" will be applicable and the threshold would be set in terms of the authorised project spend for major projects investing in fixed and intangible assets. The government anticipates that this is likely to entail qualifying expenditure in the hundreds of millions or projects that are of national or strategic importance, but asks for respondents' views.

Unlike the current non-statutory clearance process, it will not require the demonstration of genuine uncertainty. The government is also considering whether to charge for this service in order to support its delivery and is considering whether to publish summarised and anonymised clearances in order to drive further tax certainty. The government intends to implement the new process in 2026.

Cost Contribution Agreements

The government has also confirmed that businesses will be able to obtain certainty on the transfer pricing treatment of Cost Contribution Arrangements through the UK’s Advanced Pricing Agreement programme. It intends to publish an updated Statement of Practice which will detail the necessary conditions for granting such a clearance.

Tax reliefs to support entrepreneurs and scale-ups

The government has confirmed that it will continue to work with leading entrepreneurs and venture capital firms and will look at the role of tax reliefs such as the Enterprise Management Incentive Scheme, the Enterprise Investment Scheme and the Venture Capital Trust Scheme. As part of this, the government will be holding a series of roundtables with key stakeholders in April.

Trading shares on PISCES

The government published a technical note providing detail of the tax implications in relation to employees trading their shares on the Private Intermittent Securities and Capital Exchange System (PISCES), a new type of stock market that will be introduced in 2025 which will facilitate secondary trading of private company shares on an intermittent basis.

A draft statutory instrument was also published for consultation which provides exemption from Stamp Duty and Stamp Duty Reserve Tax for transfers of admitted PISCES shares. Read more in our Insight.

Business rates

The government has confirmed that in the summer it will publish an interim report that sets out a clear direction of travel for the business rates system, with further policy detail to follow at the budget this autumn.

Osborne Clarke comment

Despite the chancellor delivering her statement against a backdrop of low UK growth, concern from employers over the impact of next month's employer's NIC rises and the wider global instability, she reiterated her plans for a growth strategy, stability and certainty for UK business. While it was encouraging to see the tax consultations that were published, the effects of these policies on growth are unlikely to be seen in the near-future and so there is still a concern, given the constraints arising from keeping within the government's fiscal rules as well as the global political and economic outlook, about the likelihood of further spending cuts and/or tax rises in the autumn.