Northern Ireland Financial & Policy Update Spring Statement 2025

Key Changes Affecting Businesses and Individuals

Welcome to our latest update, bringing you essential information regarding recent financial and policy announcements impacting Northern Ireland. From changes to tax regulations to adjustments in Universal Credit, we've compiled the key details you need to know.

Northern Ireland Specific Announcements:

• Barnett Formula Boost:

  • The NI Executive will receive an additional £14 million through the Barnett formula in 2025-26. This funding aims to support local initiatives and services.

Tax and Financial Changes:

• Making Tax Digital Expansion:

  • From April 2028, the government will expand the rollout of Making Tax Digital (MTD) for income tax Self Assessment to sole traders and landlords with incomes over £20,000. This move is designed to modernize tax administration and reduce errors.

    
    

• Increase in Late Tax Payment Penalties:

  • Starting April 2025, VAT taxpayers and income tax Self Assessment taxpayers joining MTD will face increased late payment penalties. The new rates are:

    • 3% of the outstanding tax if paid 15 days late.

    • An additional 3% if paid 30 days late.

    • 10% per annum for payments overdue by 31 days or more.

      
      

• Tackling Unpaid Tax:

  • The government is investing £87 million over the next five years to enhance HMRC's partnerships with private sector debt collection agencies.

  • Additional HMRC debt management and compliance staff will be recruited to further address unpaid tax debts.

    
    

• Tax Consultations:

  • The government has launched consultations on:

    • Enhancing HMRC's powers to tackle tax advisers facilitating non-compliance.

    • New measures to close in on promoters of tax avoidance.

      

      RGA Accountants LTD Guide to the Spring Statement 2025

Defense Spending:

• Increased Funding:

  • The Ministry of Defense (MOD) will receive an additional £2.2 billion in funding for 2025-26.

  • Defense procurement will be reformed to expedite processes and improve access for small businesses.

  • 10% of the MOD’s equipment procurement spend will be for novel technologies starting 2025-2026.

Universal Credit Adjustments:

• Standard Allowance Increase:

  • The Universal Credit standard allowance will increase for new and existing claims above inflation from April 2026.

  • The weekly rate for a single person aged 25 and over will rise from £92 in 2025-26 to £106 in 2029-30.

• Health Element Freeze/Reduction:

  • The Universal Credit health element will be frozen for existing claimants until 2029-30.

  • For new claims, the health element will be reduced to £50 a week in 2026-27 and then frozen until 2029-30.

These changes represent significant shifts in taxation, financial support, and defense spending within Northern Ireland and the wider UK. We encourage you to review the consultation documents and stay informed about how these updates may affect you or your business

Further details on the Spring Statement 2025

See full details and accompanying HM Treasury documentation for the Spring Statement 2025