Tax experts from Johnston Carmichael have commented on the Spring Statement and the Chancellor’s plans to deliver security for the UK in an uncertain world.
Noting that the Chancellor kept her promise of no new tax rises, they demanded urgent and greater clarity on inheritance tax reforms.
Alex Docherty, partner and Head of Private Client Tax, said:
“There was no row-back on inheritance tax (IHT) following the unpopular proposals contained in the Autumn Budget, which will see family businesses with a value of over £1m subject to a 20% tax on death from April 2026. Disappointingly no draft legislation was released today [March 26] despite these changes having now been announced some months ago. 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. Whilst we gleaned some more information on how the new IHT rules will work following the recent release of the Trust consultation document, much remains unknown and yet the taxpayer is now expected to implement future plans based on limited information. Greater clarity would be welcome to help decision-making over the coming months.
“It was confirmed that Making Tax Digital for Income Tax is to be extended to sole traders and landlords with an income of over £20,000 from April 2028, although some taxpayers will be exempt.
“Again, however, with less than 12 months until sole traders and landlords with income over £50,000 are brought into the digital quarterly reporting, there is much to be done within HMRC to build out and make clear to taxpayers and tax agents alike how the system will operate. The lack of clarity to date is hampering preparation for what will be a significant change to how clients interact with HMRC surrounding their personal tax affairs.”
David Ward, partner and Head of Specialist Tax, added:
“In a Spring Statement which had promised no new tax rises, Chancellor Rachel Reeves set out ambitious plans to position Britain as a ‘defence industrial superpower’ in an uncertain world. 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.
“Despite the Chancellor keeping her word over no new tax rises, we are only days away from businesses paying significantly higher employer tax costs due to increased National Insurance contributions and other policy changes, which will affect wages, hiring decisions, and overall costs. 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.”
