New proposals in terms of tax compliance, penalties and HMRC's other powers made during Autumn Budget 2024 include the mandatory registration of tax advisers who interact with HMRC from April 2026 and an increase in the late payment interest rate.
The Chancellor, Rachel Reeves, announced the following:
- A 1.5% increase in the late payment interest rate.
- Mandatory registration of tax advisers with HMRC from April 2026.
- Consultations on:
- HMRC’s enquiry and assessment powers, penalties, and safeguards.
- Expanding tax conditionality to new sectors.
- New ways to tackle non-compliance.
- Tackling promoters of marketed tax avoidance.
- Powers to deal with tax advisers who facilitate non-compliance.
- Making better use of new and improved third-party data.
Interest etc
Late payment interest rates on unpaid tax liabilities
From 6 April 2025:
- The late payment interest rate charged on unpaid tax liabilities will increase by 1.5 percentage points.
Official rate of interest
- In-year increases in the Official Rate of Interest (ORI) may take place, where appropriate, from 6 April 2025.
Consultation outcomes
Raising standards in the tax advice market: strengthening the regulatory framework and improving registration
- A consultation response has been published by the Government on raising standards in the tax advice market.
- Respondents were strongly in favour of the proposal to mandate the registration of tax advisers who wish to interact with HMRC on behalf of their clients.
- The Government will invest £36 million in modernising HMRC’s tax adviser registration services and, from April 2026, all tax advisers who interact with HMRC on behalf of a client will have to register with HMRC before doing so.
- From April 2025 repayment claims via agents are subject to a new process.
- To be legislated in a future Finance Bill, following a technical consultation on draft legislation.
See Raising standards in the tax advice market: Consultation response
The Tax Administration Framework Review: enquiry and assessment powers, penalties, safeguards
- The outcome to A Call for Evidence has been published by the Government on enquiry and assessment powers, penalties, and safeguards.
- The government intends to consult further on three specific areas:
- Potential reforms are designed to make it quicker and easier for taxpayers to correct mistakes early compared to a lengthy investigation.
- Opportunities to reform HMRC’s use of behavioural penalties to make these simpler and more effective.
- Ways to improve taxpayer access to alternative dispute resolution and statutory review to help resolve more disputes before they reach the tribunal.
See Report outcome on HMRC’s enquiry and assessment powers
New consultations
Tackling the hidden economy by expanding tax conditionality to new sectors
- A consultation has been launched on expanding the existing tax conditionality check to licences in the waste, animal welfare and transport sectors across the UK.
- The consultation closes on 31 January 2025.
See Consultation: Expanding Conditionality
The Tax Administration Framework Review: New ways to tackle non-compliance
- A consultation has been launched on new ways to tackle non-compliance.
- Two areas for potential improvement are considered: changes to HMRC’s existing powers and processes and the potential for a new power to require taxpayers to correct mistakes themselves.
- The consultation closes on 22 January 2025.
See Consultation on new ways to tackle non-compliance
Future consultations
Promoters of marketed tax avoidance
- A consultation will be published in early 2025 on a package of measures to tackle promoters of marketed tax avoidance, including:
- New powers focussed on those who own or control promoter organisations.
- New options to tackle legal professionals behind avoidance schemes.
Enhancing HMRC’s powers to deal with tax advisers who facilitate non-compliance
- A consultation will be published in early 2025 on options to enhance HMRC’s powers and sanctions to take swifter and stronger action against tax advisers who facilitate non-compliance.
Making better use of new and improved third-party data, to help taxpayers get their tax correct the first time
- A consultation will be published in Spring 2025 on modernising how HMRC acquire and use third-party data to make it easier for taxpayers to get taxes right the first time.
Closing the tax gap: investment
The Government has announced an investment of:
- £1.4 billion over the next five years to recruit an additional 5,000 HMRC compliance staff.
- £262 million over the next five years to fund 1,800 HMRC debt management staff.
- £154 million to modernise HMRC’s debt management case system.
- £12 million to acquire further credit reference agency data to enable HMRC to better target their debt collection activities.
- £16 million to modernise HMRC’s app to allow Income Tax Self Assessment taxpayers to make voluntary advance payments in instalments.
- £4 million to enable HMRC to pre-populate Self Assessment tax returns with Child Benefit data to ensure the High Income Child Benefit Charge (HIBC) is accurately calculated and reported.
Useful guides on this topic
Autumn Budget 2024: At a glance
Our At a glance view to the Autumn Budget 2024
Our Autumn Budget 2024: Live Speech highlights
Our live feed summary of the highlights of the Chancellor's Autumn Budget speech.
