Experts react to Chancellor’s Spring Statement

Experts react to Chancellor's Spring Statement

Chancellor Rachel Reeves’ Spring Statement has drawn mixed responses from tax and business experts, highlighting both welcomed measures and lingering concerns.

Chris Campbell, head of tax at ICAS, highlighted the delayed implementation of Making Tax Digital (MTD) for Income Tax for those with income over £20,000, now set for April 2028. While ICAS “supports the concept of MTD”, Mr Campbell noted that “it would have been preferable to wait until the first cohort of taxpayers had submitted quarterly updates before committing to a firm timescale for extending the legal requirement for MTD to smaller businesses”.

He also expressed concerns about the withdrawal of HMRC’s online filing service, stating, “we do have concerns that this will increase the costs of complying with MTD for Income Tax, which could in turn discourage sole traders and landlords from signing up earlier than they are legally required to”. However, Mr Campbell did welcome the expansion of exemptions for MTD, ensuring that some taxpayers facing disproportionate challenges will not be required to comply.

Robert Mudge, executive director, regulation, at ICAS, focused on HMRC’s enhanced powers to tackle tax advisors facilitating non-compliance. While “supportive of tackling professional advisers who facilitate taxpayers’ non-compliance,” Mr Mudge questioned the effectiveness of some proposed measures, noting that “HMRC’s own figures demonstrate that non-compliance activity is associated predominately with tax advisers who are not members of professional bodies”.



Mr Mudge added: “For the most serious offenders, proposals to provide HMRC with enhanced investigatory powers and stronger penalties are welcomed.”

The upcoming 2025 spending review was a key point for Christine Scott, head of charities and reporting at ICAS. She emphasised that “There’s a lot hanging on the outcome of the spending review, due to be announced on 11th June”.

While welcoming the UK government’s plans for more frequent spending reviews, she highlighted the already announced resource Departmental Expenditure Limits growth of 1.2% per year and the £3.25 billion Transformation Fund. Ms Scott also noted that the review process will be “zero-based, suggesting that this is a comprehensive spending review”.

Experts react to Chancellor's Spring Statement

Alex Docherty – Partner and head of private client tax at Johnston Carmichael

Alex Docherty, partner and head of private client tax at Johnston Carmichael, drew attention to the lack of clarity on inheritance tax (IHT) reforms. Ms Docherty expressed disappointment that “no draft legislation was released today despite these changes having now been announced some months ago”.

She warned that “with just over 12 months to go till the tax landscape significantly changes, it does not give business owners much time to plan their succession strategy”.

She also echoed concerns about the clarity surrounding the implementation of MTD.

Experts react to Chancellor's Spring Statement

David Ward – Partner and head of specialist tax at Johnston Carmichael

David Ward, Johnston Carmichael partner and head of specialist tax, acknowledged the Chancellor’s promise of no new tax rises but, pointed out that “we are only days away from businesses paying significantly higher employer tax costs due to increased National Insurance contributions and other policy changes”.

He welcome Ms Reeves’ “ambitious plans to position Britain as a ‘defence industrial superpower’ in an uncertain world”.

Mr Ward explained: “She said defence would be at the heart of the UK’s modern industrial strategy – creating a Britain that buys, makes and sells.

“After previously announcing that defence spending would rise to 2.5% of GDP, the Chancellor confirmed the government would make a downpayment of £2.2bn in the next financial year to deliver the skills, jobs and opportunities of the future here in the UK. She said this will boost traditional defence manufacturing sites including Plymouth and Rosyth.

“The government also pledged to spend a minimum of 10% of the MoD’s budget on technology including AI and drones, boosting production in advanced manufacturing centres such as Glasgow, Derby and Newport.

He added: “While her plans to turbocharge our defence industry may bring some economic benefits, they are unlikely to offset the wider impact of rising employment costs on growth and business confidence.”

Experts react to Chancellor's Spring Statement

Martin Bell

Martin Bell, tax partner at BDO, noted that mid-sized businesses “may have taken some hope from today’s Spring statement”, particularly the absence of new taxes and the increased spending on defence. He also highlighted the potential boost for the construction sector from the allocation for affordable housing and training.

He said: “Elsewhere the construction sector should be somewhat buoyed by the £2bn allocation for affordable housing, and further £600m earmarked for training the engineers, bricklayers, electricians and carpenters needed to deliver on the government’s ambitious targets. If the OBR’s prediction of a 40-year housebuilding high is anything to go by, growth for this sector seems likely.”

However, Mr Bell cautioned that “targeted support and investment is needed across all sectors if mid-sized businesses, the economic engine of this country, are to get anywhere close to realising their full potential”.

Daniel Hough, financial planner at RBC Brewin Dolphin, advised individuals to focus on previously announced changes, stating, “now is the time to concentrate on the raft of changes she announced in the Autumn Budget and get your ‘house’ in order and assess your financial situation whilst you still have the time”. He specifically recommended seeking advice on pension rules and business relief schemes.

Experts react to Chancellor's Spring Statement

Dr Liz Cameron CBE

Dr Liz Cameron CBE, CEO of the Scottish Chambers of Commerce, expressed concerns about the downgraded economic growth forecast for 2025, calling it “a huge wake up call to all parts of government to focus on what levers they can pull to accelerate growth”.

She stressed that “businesses need support today to secure the economic growth of tomorrow” and welcomed the Chancellor’s focus on the efficiency of government spending. Dr Cameron also emphasised the importance of strengthening international trade ties for Scotland’s economy.

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