Unlike the Autumn Budget 2024, today’s Spring Statement was rather quiet in terms of tax announcements:

• In her rebranded ‘Spring Forecast’, the Chancellor, Rachel Reeves, repeated her commitment to one major fiscal event a year and stated that no further tax increases would be announced before the next Budget.
• There will be a renewed focus to crackdown on tax evasion, with Reeves announcing plans to “increase the number of tax fraudsters charged each year by 20%”, through the use of AI and rewarding informants, alongside HMRC, Companies House and the Insolvency Service working together to tackle business “phoenixism”.
• Several changes to government spending were announced, including cuts to the welfare system and the civil service, but an increase to defence spending.
• No further changes to Inheritance Tax (IHT) or the abolishment of the domicile regime were announced today, although there is an open consultation on the topic of agricultural relief for IHT, and the use of trusts to mitigate the tax exposure somewhat (perhaps due to recent protests by farmers). We will keep an eye on developments. We are also awaiting a response from the government in relation to its recent consultation on subjecting pensions to IHT from April 2027, which we will also be monitoring.

Commenting on today’s announcements, Steve Wren, said: “I think it is likely that we will see an increase in HMRC scrutiny, challenges, and formal investigations in the future. It remains more important than ever for clients to ensure their tax planning is robust and reported correctly, so that costly and often stressful HMRC challenges can be concluded efficiently.”

We will publish more in-depth analysis of the Chancellor’s Spring Forecast announcements tomorrow.