Spring Budget 2024 – Addressing the tax gap

These changes include:

• Investing a further £140 million to improve HMRC’s ability to manage tax debts. This is on top of the £163m already announced in the Autumn Statement 2023 and is clearly seen as a key area of investment for HMRC. This investment is expected to bring in over £3bn of additional funds from those who owe debts to HMRC.
• Legislation in the Spring Finance Bill 2024 closing what HMRC perceives to be a loophole in the Transfer of Assets Abroad (ToAA) legislation, whereby individuals have been using a company to bypass the current provisions. It has been announced that these measures will take effect from 6 April 2024, leave a one-month window of grace, however there may be anti-forestalling provisions contained within the legislation to catch transactions and income in the interim, as there has been with other recent anti-avoidance legislation.
• Updates to HMRC’s digital services for self-assessment, which will be implemented from September 2025. This will automate the process for those requiring a Time To Pay arrangement, and also add a Budget Payment Plan option for individuals to make instalment payments in advance towards their tax liability, which may operate in a similar to PAYE deductions, on a real-time basis.
• HMRC’s focus on raising standards in the tax advice market. This has no doubt been brought on by bad actors and promoters of tax avoidance arrangements. A consultation will be published on the regulatory framework for tax advisors and potential ways to strengthen this, including the requirement for tax advisors to register with HMRC if they are to communicate with HMRC on a client’s behalf. This is not a new topic, with the Chartered Institute of Taxation (CIOT) having previously advised members not to undertake Code of Practice (COP) 9 work if they do not have the necessary experience. However, it is new territory for HMRC to be publicly exploring this area.
• Tackling non-compliance in the umbrella company market and protecting workers employed by said companies. The Government’s aim is to ensure fair and genuine competition and prevent tax losses which are a result of non-compliance. More information will follow on 18 April 2024, with new guidance being released in the summer.
• The next Tax Administration and Maintenance Day is to take place on 18 April 2024 to “bring forward a further set of tax administration and maintenance announcements”. Whilst no further detail has been published at this stage, in line with previous years, we expect this to be a mini-Budget of sorts but focussing solely on the powers and activities of HMRC. We expect the announcements to cover a range of taxes, in addition to trailing new consultations, and setting out next steps for previous consultations which have closed.

For further information on the above, contact Danielle Ford, Partner and Head of Tax Disputes & Resolutions, or Riocard Hoye, Senior Manager.