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The new crackdown on tax evasion and avoidance is expected to win an additional £1 billion for the Treasury over the next four years under the measures mentioned in today’s spring statement.
In the statement’s sole revenue-raising measure, Prime Minister Rachel Reeves announced a package of initiatives based on measures to tackle tax non-compliance set forth in the budget last fall.
The Spring Statement measures include an increase in the tax rate, in which taxpayers in the government’s Making Tax Digital (MTD) program, are charged from 2% to 3%.
The change will affect VAT taxpayers starting next month, and will also affect self-employed people and landlords with at least £50,000 in annual revenues when they join the programme from April 2026.
The new tax rate will be 3% of the 15-day postponed unpaid tax, plus an additional 3% if there is a 30-day postponement, and another 10% per year, where postponements of more than 31 days are postponed.
The UK and Wales Certified Public Accountants Institute described the increase as “very important,” warning that timely payments are “more important than ever for taxpayers and businesses.”
Wednesday’s announcement included imposes more tax liabilities on private debt collection agencies and recruiting 1,100 debt and compliance staff from tax authorities. These additional officers will be added to the 5,000 new compliance staff announced in the fall.
Reeves said new measures to increase tax collection will raise another £1 billion in tax revenue by 2029-30. Overall, the changes she announced on Wednesday will incur additional taxes by the £2.2 billion period.
Support for Spring Statement documents released Wednesday revealed details on how the government is planning to increase tax collection by closing the evasion and avoidance.
These included separate consultations on penalty reforms affecting all other taxpayer groups, except for MTD payers collected when taxpayers declared false information to the HMRC. Strengthen the authority of tax authorities to crack down on developers of evasion schemes, including lawyers and tax advisors. We will make better use of data sharing between HMRC and external agencies on taxpayer issues.
Penalties require consultations on either the taxpayer fails to properly declare appropriate information to the HMRC, or the improvement of existing penalty systems in the event that a new regime fails to develop.
The government said it was heartfelt to introduce “higher inaccuracy and failed penalty notifications” to those who intentionally hide or underreport HMRCs.
We proposed a model consisting of two types of penalties: “Failed/Failed Penalty Notification” and “Citizen Avoidance Penalty Penalty.”
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The civil avoidance penalty applies as “reserved for cases of more serious intentional violations due to stricter sanctions.”
Another talks released on Wednesday also called for feedback on how the government will better crack down on people who promote tax avoidance and avoidance. This has ensured “effective deterrent and response to tax advisors that harm tax systems and promote client non-compliance” in response to comments on ways to strengthen the power of HMRC.
In recent years, there have been several tax advice scandals in which Rogue Advisers promoted non-compliant advice and schemes. These range from tax avoidance clothing that preys on NHS workers to businesses that are driving fraudulent research and development claims, and the use of unreliable loan schemes.
The consultation asks for opinions on various enforcement measures to tackle fraudulent advisors, including strong penalties, the disclosure of details of tax advisors subject to HMRC sanctions, and the HMRC, which shares information about non-compliant advisors with their specialist bodies. It also proposes new options to tackle the legal experts behind the evasion scheme.
Other talks announced Wednesday confirmed the proposals previously announced. April 2028 was confirmed as the dates required for self-employed and landlords with revenues of at least £20,000 to comply with the MTD program. The government has also announced planned consultations on the introduction of a new system of new pre-clearance for R&D claims to prevent errors and fraud and improve the claims experience.
