THE CHANCELLOR’S SPRING STATEMENT

Despite a cut in the OBRs growth forecast, tax announcements were very limited in Rachel Reeves’ Spring update this week.  There were however a few mentions from HMRC including a new focus on collecting tax debts, prosecuting more tax fraudsters and rewarding informants. 

HMRC will also begin to write to taxpayers whose 2023-24 Self-Assessment tax return showed income of over £50,000 from self-employment and property, i.e. sole traders and landlords, to let them know that they may need to use MTD for Income Tax from 6 April 2026 unless exempt.

And lastly, they also announced an increase in late payment penalties for both VAT and Self-Assessment from April 2025 to ‘encourage’ people to pay on time.

national living wage

Yes, we wrote about this last month, but don’t forget the new Minimum and National Living Wages rates (see below) come into force on 1 April 2025.

Along with ensuring that your payroll is adjusted, you may want or need to consider adjusting internal pay structures to maintain a balance between lower-paid employees and more experienced staff.  Additionally, if you can remain competitive you may want to make price adjustments for your products or services to offset these higher payroll costs.

HMRC TIME TO PAY

If you have a fundamentally viable business but find yourself facing financial challenges, for example as the result of increased national living wage and employers’ national insurance costs, you can enter into an arrangement with HMRC for liabilities to them such as VAT or PAYE. 

A formal Time to Pay Arrangement (TTP) usually allows the business to pay the debt over a period that it can afford via regular monthly payments.  Most TTPs are for periods of 12 months or less and you should ensure that all taxes are considered as HMRC will not expect debts to accumulate in other areas of tax owing to them.

For smaller debts a TTP can be set up online, subject to meeting certain criteria.  Others are looked at on a case-by-case basis and you should be prepared to furnish them with up-to-date management accounts and a sensible forecast before entering into discussions with them.

WORKPLACE RECYCLING

Unless you are a micro-firm with less than 10 full time employees in total, all workplaces in England will have a legal duty from 31 March 2025 to present waste separated in accordance with their waste collector, e.g. dry recyclables such as plastic, metal, paper separately from food waste and black bin waste.  Gov.UK advises that if your current waste collector does not offer the full range of collection services you will need to make arrangements with another provider to avoid the risk of receiving a compliance notice from the Environment Agency.   Simpler recycling: workplace recycling in England - GOV.UK

HEALth & safety GUIDANCE for self-employed workers

There are 6 high-risk working activities that can result in serious injury or fatality: agriculture (including forestry); construction; work involving asbestos; working with gas or genetically modified organisms and working on a railway.  To make it easier to understand the risks, find our when the law applies and comply with it, The Health & Safety Executive (HSE) has redesigned its webpages Self-employed workers - Overview - HSE