With the Chancellor remaining steadfast in her commitment to have just one major fiscal event each year, this Spring Statement was, for the first time in a number of years, a relatively small fiscal event.

There was no tweaking with the rates of Income Tax or Corporation Tax and no rabbit out the hat moment.

Instead, the Chancellor outlined the updated Office for Budget Responsibility estimates for growth, cuts to welfare and civil service spending as well as a few technical changes to HMRC’s administration of tax collection that could impact the self-employed.

It was announced at the Autumn Budget that Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) would apply to all sole traders with earnings over £20,000 before the end of this Parliament.

Yesterday, government announced that this cohort would be mandated for MTD for ITSA from April 2028.

So the current timetable for MTD for ITSA is:

• From April 2026, it will apply to sole traders and landlords with an income of more than £50,000
• From April 2027, it will apply to those with an income of more than £30,000
• From April 2028, it will apply to those with an income of more than £20,000

We’re concerned that a good number of this last cohort to be mandated will be unrepresented by an accountant and will likely find the quarterly reporting requirement of MTD burdensome. Similarly, they may have to incur software costs when they may have a relatively low profit margin.

We’re calling on government to extend the £30,000 threshold that’s already in place for 2027, and not lower this until it is clear that MTD doesn’t cause undue problems for lower income businesses.

It was also announced yesterday that self assessment taxpayers will have to file their final tax return through a piece of MTD software when required to comply with MTD. Previously, they could still use HMRC’s online filing service to submit their final tax return.

It’s been well documented that this Labour government are increasing funding for HMRC’s compliance activities, enabling an increase in the number of compliance officers. This is part of their overall strategy to close the tax gap – the difference between what the government expects to receive in taxes and what they actually get – and in particular, they have their eyes set on small businesses who they view as largely responsible for this gap.

As part of this strategy, the penalties for late payment of VAT and ITSA to HMRC will now be increased from April this year whilst HMRC will also be exploring automated debt recovery options.

New consultations will now explore how government can clampdown on rogue tax advisors that facilitate non-compliance as well options for strengthening HMRC’s powers to target the promoters of tax avoidance schemes.

We, at IPSE, have long been calling on government to do more when it comes to going after the scheme promoters so it is welcome to see them considering extra powers for HMRC in this area.

We will be responding to both of these consultations in the coming months and will be keeping members abreast of our response and any future changes in this area.

Whilst we weren’t expecting much for the self-employed in this Spring Statement, the sector can breathe a small sigh of relief that the Chancellor didn’t opt for any further tax measures to meet her fiscal rules.

The Autumn Budget and the hike to National Insurance is still having a profound impact on clients’ hiring plans and we are repeatedly hearing from our members of reduced demand for their services. Indeed, our recently published IR35 Spotlight Report revealed that two in five contractors (43%) have seen a decline in demand since the Autumn Budget.

Unfortunately, with global pressures and the potential for future tariffs places on our economy, this feeling of uncertainty amongst clients is unlikely to ease any time soon.