Spring 2025 Tax Update from Exchequer Secretary James Murray

We've summarised the treasury's lengthy statement especially for you!

1. HMRC Going Digital: HMRC is increasing its use of digital communication, such as sending letters through the HMRC app. This means freelancers will get important information faster. HMRC aims to save £50 million per year by 2028-29 by reducing the amount of paper mail it sends. However, paper communication will continue for critical correspondence and for those who can't access digital services.

2. Self Assessment Changes: The government is changing the rules around who needs to file a Self Assessment tax return. Specifically, they are raising the Income Tax Self Assessment (ITSA) reporting threshold for trading income to £3,000 gross. This means that some freelancers with gross trading income below £3,000 may no longer be required to file a Self Assessment return. This change intends to remove up to 300,000 taxpayers from the Self Assessment system.

3. Simplified Guidance: HMRC is working to improve the clarity and accessibility of its guidance and communications. This includes simplifying the language used in HMRC letters to make them easier for freelancers to understand, which should reduce confusion and stress.