Spring Statement: Overview

• Monthly reporting of Bank and Building Society Interest (BBSI) in a new XML format based on the Common Reporting Standard (CRS) schema;
• Mandatory collection of National Insurance Numbers (NINOs) for new accounts and reasonable efforts to obtain NINOs for existing accounts;
• Implementation of CRS-like due diligence obligations during customer onboarding (in practice restricted to tax identification number validation); and
• Introduction of per-account penalties aligned with CRS/Automatic Exchange of Information(AEOI)/Cryptoasset Reporting Framework (CARF) regimes.

The consultation also explores similar considerations for Merchant Acquirers and discusses the potential collection of dividend and other investment income data.

These proposals could significantly impact reporting processes and costs for banks, fintechs and a wide range of UK financial service providers. Many of the issues involved have been consulted on by HMRC before, both as a wholesale transformation (2016’s Making Tax Digital and Better Use of Information) and as incremental changes to BBSI over the years.

Reform of behavioural penalties
A consultation was published seeking views on options to improve the ways in which behavioural tax penalties are calculated and applied. Current options range from a strengthening of the existing system to a complete rewrite of the rules around penalties for inaccuracies and for failures to notify. This consultation closes on 18 June 2025.

Consultations aimed at tax advisers and ‘promoters’
Two documents were published in this area:

• A consultation on enhancing HMRC's ability to tackle tax advisers facilitating non-compliance. It invites views on options to enhance HMRC’s powers and sanctions to take action against professional tax advisers who facilitate non-compliance in their clients’ tax affairs. This consultation closes on 7 May 2025; and
• A consultation on closing in on promoters of tax avoidance. It seeks views on a range of new measures including additional powers for HMRC and stronger sanctions (including new criminal offences) aimed at tackling promoters of tax avoidance, including by expanding and strengthening the DOTAS regime (which can, in certain cases, impose disclosure obligations on taxpayers as well as advisers). This consultation closes on 18 June 2025.

As always when looking at changes aimed at advisers, the key issue will be the question of scope, both in terms of who might be affected and the types of behaviour covered. Some of the changes have the capacity to bring ‘enablers’ within the proposals, a term which can be interpreted broadly and can go beyond tax services to include financial institutions and others. Business advisers will be keen to monitor these developments and understand the additional due diligence that may be required to ensure they are fully compliant.

Climate Change Levy (CCL)
The Government has announced it will remove CCL costs from electricity used in electrolysis to produce hydrogen and is consulting on options to implement this change. The consultation also seeks views on other areas where CCL could be reviewed to ensure it is aligned with developments in the changing energy landscape and the Government’s clean power and net zero missions. Representations received will help inform the scope of a wider review of CCL that will be conducted at a later date. The consultation closes on 7 May 2025.

We have pulled out below some of the more interesting comments in HM Treasury’s full Spring Statement 2025 document.

Residence based IHT regime and reform of domicile
It was confirmed at the 2024 Autumn Budget that the non-dom reforms and introduction of a residence based inheritance tax (IHT) regime would be going ahead from 6 April 2025. There were no new announcements on this at the Spring Statement, but the Government did confirm it “will continue to work with stakeholders to ensure the new regime is internationally competitive and continues to focus on attracting the best talent and investment to the UK”. What this means in practice we will need to wait and see, although we are expecting HMRC guidance on the new legislation and HMRC answers to other technical issues raised by the professional bodies.

Roundtables on EMI/EIS/VCT schemes
As part of its growth agenda the Government has said it will look at “the role of tax reliefs such as the Enterprise Management Incentives 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 over April”. 

Possible future changes to ISAs
There was a lot of speculation in advance of the Spring Statement that the Chancellor would reduce the yearly Individual Savings Account (ISA) contribution limit for cash ISAs below the current £20,000 in order to encourage investment in stocks and shares ISAs. While no such change was forthcoming the Government did confirm that it “is looking at options for reforms to Individual Savings Accounts that get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission”. So it is quite possible we will see some changes announced at the Autumn Budget.

Business rates
At the 2024 Autumn Budget the Government published a discussion paper setting out its priority areas of reform of the business rates system. A follow up was given at the Spring Statement as follows: “In summer, the Government 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”.

For further information please contact:

• Tim Sarson
• Sharon Baynham