Spring Forecast 2025 Wish List: Technology

The Treasury has committed to one major fiscal event per year. With the significant changes announced in the Autumn Budget 2024, it should be unlikely that there are any further major changes on the horizon to be announced in the spring statement on 26 March 2025.

That said, the Government has not ruled out any new announcements, so we may still see new tax rules being implemented this year.

With nothing being ruled out, it is possible the Chancellor may reverse some of the more controversial changes announced in the autumn budget.

In particular, the increase to employers’ NICs by reducing the threshold at which employers start paying NICs could hit tech businesses in the startup and growth phase whose margins would be more significantly impacted. A reversal of this measure would be welcome for many employers, particularly as it is unlikely that increases to the National Minimum Wage will be reversed.

Another area that could be up for reconsideration is the proposed increase to capital gains tax for those making disposals eligible for Business Asset Disposal Relief. The rate of tax is set to increase from 10% to 14% from April 2025 and 18% from April 2026. This is important to consider when tax planning for those in the tech sector looking to exit, and a reversal on this may give back tech business owners the flexibility to consider their options.

The Government is committed to stimulating growth in the economy. If reversals to previous announcements are made, we can be certain the gap will have to be filled elsewhere. This might mean tax increases somewhere else, or it might mean spending cuts.

It is unlikely there will be any changes to tax rates and thresholds meaning fiscal drag will therefore continue to help the Government collect taxes from working people and pensioners.

In autumn 2024 the Government announced various pilots and investments in the digital and tech sector having identified this as a particular area for growth. A digital transformation roadmap is also due to be published in spring this year. We hope the Chancellor will offer positive updates and no cuts to spending in this area.

Elsewhere, we hope there will finally be some certainty over an implementation date for Making Tax Digital for Income Tax Self Assessment. It is due to be phased in from April 2026, but has been delayed a number of times so advisers have remained sceptical. For those in the business of accounts software there should be a boom when MTD for ITSA eventually takes off.