The UK’s Spring Statement delivered on 26 March 2025 did not include further tax increases and the Chancellor stuck to her commitment to one fiscal event per year – which is going to be the Autumn Budget. Yet, there were more than a few interesting titbits in the Statement, and the documents published alongside it. I’ve limited myself to three areas. One commonality between the latter two is the indication that the government may move towards paid-for clearances!  

Closing the tax gap

Unsurprisingly, closing the tax gap remains a focus for the government with the intention to raise additional gross tax revenues of £1bn per year by 2029-30. 

One focus will be tackling fraud. The government intends to increase yearly charging decisions for tax fraud by 20% by 2029-30, and one area mentioned in this respect is “fraud facilitated by those in large corporations”. HMRC will also launch a new reward scheme later this year pursuant to which informants can receive compensation linked to a percentage of the additional tax take resulting from their disclosure. One area of focus here would be “non-compliance in large corporates” (para 2.25 of the Green Book). 

A consultation of particular interest to the financial services industry is that on opportunities for improving the quality of data acquired from third parties on financial account information and card sales to ensure it gets the “right data, of the right quality, at the right time”.  The proposals to achieve this include moving away from the current, notice-based approach towards modern standing reporting obligations where data is provided closer to real-time and more frequently (probably monthly), requiring the collection of tax references (such as NI numbers or CRNs) to support improved data matching, introducing due-diligence requirements for data suppliers to improve data quality, and adopting a modern penalties regime aligned with the approach for international bulk third-party data, including associated safeguards. HMRC is also “testing early thinking” on expanding the requirements to collect data on dividend income and other income from investments.  The consultation is open until 21 May 2025.

Another consultation on which it is worth keeping an eye concerns the reform of behavioural penalties, as one option under consideration is a complete redesign of the system to create two separate types of penalty (both of which would be tax-geared): a higher penalty for civil evasion aimed at deliberate non-compliance and another penalty for all other types of misdeclaration/ failure to notify (with a reduction for disclosure and, potentially, a “reasonable excuse” concept instead of a different category for “careless” errors). This consultation is open until 18 June 2025.

Major projects and CCAs

As promised in the Corporate Tax Roadmap, the government published a consultation on “Advance tax certainty for major projects”. Written responses can be submitted until 17 June 2025, but if you would like to be considered for inclusion in a consultative meeting, you should notify the Treasury and HMRC by email by 15 April 2025 (see para 1.14 on page 10 for the email addresses). 

• The consultation envisages that the new process would be implemented in 2026. Threshold conditions (based on size and/ or other factors such as strategic importance) would be set with the result of “dozens, rather than hundreds, of projects being serviced per year, each likely to entail qualifying expenditure in the hundreds of millions.”
• The new process would focus on corporation tax and current (or prospective) corporation tax payers (although the government is open to suggestions to broaden the scope to also cover e.g. stamp taxes and employer duties). It would be intended to give certainty on key points, rather than comprehensively review all tax aspects of a particular project. Moreover, the consultation indicates that giving certainty should be balanced with preserving the integrity of anti-avoidance provisions, and “this is likely to be reflected in any final scope with regards to main purpose tests”. If such tests always fell outside its scope, the usefulness of the new process would seem greatly reduced.  
• Other questions thrown up by the consultation include: should the process be subject to a fee? To what extent should taxpayers be bound by any resulting clearance? Should they have to notify HMRC if they chose not to rely on it? Given that clearances are envisaged to be valid for a period of up to five years (subject to any change in law or the underlying facts), should taxpayers have an obligation to reconfirm the facts and assumptions each year? Should summaries of clearances be published (on the understanding that other taxpayers can’t rely on them, but on the basis that they could help “to clarify HMRC’s position” – which would then beg the further question whether this would be intended to count as a “known position” for the notification of uncertain tax treatment for large businesses)? 

The “Advance tax certainty for major projects” consultation document also addresses cost contribution agreements (CCAs). There had been an open question whether legislation would be necessary to address concerns around HMRC taking a different view from other tax authorities on when a CCA can be an acceptable pricing mechanism under the OECD’s Transfer Pricing Guidelines. The government’s view now appears to be that this is not necessary. Instead, it is intended that certainty on the treatment of CCAs will be provided through the APA process and the relevant Statement of Practice will be updated accordingly. 

The Corporate Tax Roadmap had also promised a consultation on predevelopment costs. This is still outstanding – which is perhaps unsurprising, given that the Upper Tribunal’s decision in Gunfleet Sands gave the impetus for it, and the Court of Appeal only recently overruled the Upper Tribunal in this case (see my colleague’s post).

R&D pre-clearances

The consultation on pre-clearances for R&D reliefs (another item promised in the Corporate Tax Roadmap and published alongside the Spring Statement) is open for comments until 26 May 2025. 

It acknowledges that the current, voluntary advance assurances programme open to smaller businesses is not well utilised (and seeks to explore why to inform the government’s reforms in this area). The consultation explores the value of pre-clearances at different stages of a project or potential claim, and whether the process should be voluntary or mandatory. In either case, it is envisaged that the process would not apply across the board but be targeted at businesses (based on size or risk level) and/or sectors. 

Given repeated references to a size threshold and the fact that one aim of introducing the pre-clearance process is to reduce mistakes and fraud (which has been a more of an issue in respect of smaller businesses), large businesses may well continue to be outside the scope of the pre-clearance process, and this may make sense given that questions could be raised through their Customer Compliance Manager. If large businesses, however, saw particular value in such a process, it would still be worth replying to the consultation – especially if they were willing to pay for clearances… (see section on “Voluntary assurances” and Question 17).