The UK Chancellor of the Exchequer delivered her Spring Statement on 26 March 2025. As many had anticipated, the Spring Statement contained no major UK tax changes. The Chancellor did however announce a continuing focus on tax avoidance in her speech. Consultations published by the UK tax authorities (His Majesty's Revenue and Customs or HMRC) soon after the Statement provided more details on these measures, as well as covering opportunities for greater tax certainty. The Spring Statement itself outlined some of the Government's thinking on certain tax areas it is considering going forward. Contrary to some speculation, there was no mention of plans for the UK's digital services tax.

Tax certainty

Advance tax certainty for major projects

At Autumn Budget 2024, the Government announced in its Corporate Tax Roadmap that it would be consulting on a new process to provide increased tax certainty in advance for major projects. (For background, see EY Global Tax Alert, UK Autumn Budget delivers significant tax increases but seeks to plan for the future, dated 31 October 2024.) The consultation launched on 26 March 2025 seeks views on a proposal to provide a dedicated service, tailored to the "very largest and most innovative investment projects," which would provide statutory certainty over how the tax rules will be applied to a project if it proceeds as planned. The consultation runs until 17 June 2025.

Entities directly undertaking major investment projects would be eligible for advance tax certainty. At time of the application, those entities may not have an existing UK presence but would intend to acquire a UK presence once their investment project formally proceeds. Eligible entities would either already be, or in the future be, subject to corporation tax.

R&D tax relief advance clearances

The Government is also seeking views on widening the use of advance clearances for research and development (R&D) tax relief to reduce error and fraud, provide certainty to businesses and improve the customer experience. The consultation launched on 26 March 2025 runs until 26 May 2025.

The Government is considering who could be entitled to use a new clearances scheme and who might be obliged to use it, as well as where in the claims process a scheme could fit and the role of agents. It suggests that an advance assurance system needs to be focused on a well-defined subset of claims and/or companies. A voluntary service would therefore not be available to all, and a mandatory service would only be mandatory for some.

The Government proposes to focus voluntary assurances on growing and high-potential companies, as well as sectors set out in the Government's Industrial Strategy. By contrast, the Government proposes that a mandatory service should apply to companies that would be specified in legislation based on factors such as sector, size and previous compliance history.

Cost Contribution Agreements

In the Corporate Tax Roadmap 2024, the Government committed to reviewing the transfer pricing treatment of Cost Contribution Arrangements (CCAs). CCAs are contractual agreements between group companies to share the costs and benefits of developing assets such as intellectual property.

Following informal discussions with interested parties, the Government intends to offer clearance on the treatment of CCAs through Advance Pricing Agreements (APAs) using existing legislation. The Government intends to publish an updated Statement of Practice that will detail the necessary conditions for granting such a clearance. The Government has suggested that the commerciality of the CCA and the expected profitability of the UK participant over its term will likely be factors in determining whether HMRC enters into an APA.

Other tax announcements

The Spring Statement contains a number of comments from the Government on tax, including that:

• It will continue to work with stakeholders to ensure the new residence system is internationally attractive.
• It will hold a series of roundtables with key stakeholders in April 2025 to review the role of tax reliefs such as the enterprise management incentives scheme, the enterprise investment scheme and the venture capital trust scheme.
• It is considering options for reforming 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 Government's "growth mission."
• It will bring forward further measures in Spring 2025 to simplify the tax and customs systems and, in Summer 2025, HMRC will publish a transformation roadmap. These measures will collectively reduce administrative burdens so businesses and individual taxpayers spend less time on tax and customs administration.
• It will publish, in Summer 2025, 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 in Autumn 2025.

Separately, HMRC has published a technical note addressing some of the tax issues associated with the Private Intermittent Securities and Capital Exchange System (PISCES), a new type of stock market that will facilitate secondary trading of private company shares on an intermittent basis. HM Treasury (HMT) will lay secondary legislation in May 2025 to implement PISCES. Trading on PISCES is likely to begin later in 2025. A draft statutory instrument has been published for technical consultation on stamp duty and stamp duty reserve tax exemption for certain PISCES share transactions.

There is also the launch of a consultation seeking views to determine the best legislative route to remove Climate Change Levy (CCL) costs from electricity used in electrolysis to produce hydrogen, as well as views on other reforms of the CCL.

Continued focus on tax payment

The Government has published four consultations covering:

1. How HMRC can make better use of third-party data to increase automation and close the tax gap — seeking views (primarily from financial services providers including banks, building societies, merchant acquirers and other providers of card acquiring services) on opportunities for improving the quality of data acquired under HMRC's bulk-data-gathering powers for tax administration
2. Proposals to strengthen HMRC's ability to take action against tax advisers who facilitate noncompliance from their clients
3. A comprehensive package of measures addressing promoters of marketed tax avoidance
4. Options to simplify and strengthen HMRC's penalties for inaccuracy and failure to notify

The Spring Statement also refers to the new HMRC reward scheme for informants, which will be launched later this year to target serious noncompliance involving large corporates, wealthy individuals, and offshore and avoidance schemes. The new scheme will take inspiration from the successful US and Canadian models, rewarding informants with compensation linked to a percentage of any tax taken as a result of their actions.

Finally, the Government has confirmed that sole traders and landlords with qualifying income exceeding £20,000 will be brought within Making Tax Digital (MTD) for income tax Self Assessment (ITSA) from April 2028. To encourage taxpayers to pay on time, late payment penalties will be increased for value-added tax (VAT) taxpayers and ITSA taxpayers as they join MTD from April 2025 onward.