Deloitte NI comment on Spring Statement

Aisléan Nicholson, Partner at Deloitte in Belfast said:

“Business and individuals alike will welcome the fact that there were no further tax increases announced in the Spring Statement, in line with commitments made by the Chancellor in the Budget in the autumn.

“While some individuals are looking forward to the boost in wages from the increased National Minimum Wage (NMW), for business, however, the real economic impact of the autumn announcements will only kick in from April, with both the increase in NMW rates, and the increase in the rate of Employer National Insurance Contributions (NICs) from 13.8% to 15% taking effect, along with the reduction in the secondary threshold at which those NICs apply.

“Hopefully most local businesses at this stage will have explored any measures available to them to mitigate the impact of the NICs increases – for example the increase in the Employment Allowance and the existing exemptions relevant to employing under 21s, young apprentices etc. Whether - or more likely when - the impact of these changes start to flow through to the local economy in the form of, for example, lower pay increases in future years or price rises for consumers and therefore a direct impact in the pockets of individuals, is harder to predict.  

“Many of the other tax related measures in the Spring Statement were part of a continued focus on both modernising the tax system, making it easier to pay the “right” amount of tax and closing the “tax gap” – the difference between the amount of tax collected from taxpayers and what HM Revenue & Customs believe should be paid. The announcements included:

• the continued rollout of Making Tax Digital (MTD) for income tax Self Assessment (ITSA), with sole traders and landlords with qualifying income over £20,000 joining from April 2028 – bringing an additional 900,000 people into scope;
• investing in HMRC’s debt management capacity and compliance activity, including the recruitment of more than 500 new HMRC compliance staff, on top of the 5,000 announced in the Budget in the autumn;
• the issue of a number of consultations signaling a tougher stance on non-compliance, with proposals including HMRC exploring using external data sources to identify discrepancies and improve tax collection.

“It’s clear that targeting fraudulent behaviour remains a key ambition for HMRC and as well as increasing staffing levels, they are looking to other innovations such as implementing reward schemes for informants, recruiting experts in private wealth management and deploying AI and analytics to seek to spot fraud. Whilst compliant taxpayers should have nothing to fear, this focus is likely to require taxpayers to ensure that they have good documentation and support for positions taken in tax returns – definitely an area of best practice where taxpayers are seeing greater value.

“Overall, whilst there are some areas of detail to be explored in light of the various new consultations issued alongside the Spring Statement which may lead to further amendments to tax legislation in the future, the previously announced changes to NICs and stamp duty, and in particular capital gains and inheritance tax, remain the most significant additional tax raising measures impacting businesses and individuals.”

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