What does the spring statement mean for self-employed people?

Much of the focus has, rightly, been on welfare since chancellor Rachel Reeves delivered her spring statement yesterday.

But that means some elements might have slipped under the radar, particularly if you’re self-employed.

As it wasn’t a full-blown budget, there were no changes to taxation, or news of any schemes to help self-employed people and small businesses in particular.

However, there was one notable announcement.

Late payment penalties to increase

Late payment penalties for VAT taxpayers and income tax self assessment taxpayers will go up in April 2025.

If you miss a payment by 15 days, you'll be charged a 3% penalty. 

If it's still unpaid after 30 days, another 3% is added. If the payment is overdue for 31 days or more, you'll also face an extra 10% charge per year until it's paid.

The new rates will be 3% of the tax outstanding where tax is overdue by 15 days.

This is part of a wider effort to “close the tax gap”, which will include efforts to clamp down on tax avoidance and modernising how HMRC uses third-party data, so it’s “easier for taxpayers to get tax right first time”.

Who needs to file a self-assessment tax return? 

If you’re self-employed or have an untaxed source of income, such as a side hustle, you’ll need to complete and submit a self-assessment return, even if you’ve not earned anything.  

If you’re not sure whether you need to file, use HMRC’s online tool or contact them directly for advice.  

It’s better to be sure than risking hefty penalties.