Spending Review

The Chancellor presented her Spending Review on 11 June covering day-to-day spending over the next three tax years and investment through to 2029/30. Having now defined her spending and investment goals, with the NHS and defence top of the list, these will be hard to shift. Place those expenditure aspirations against her “non-negotiable” fiscal rules and speculation is rife on the likelihood of tax rises when the Chancellor presents her next set piece – the autumn Budget.

Interest and tax

If you’re used to HMRC automatically sorting out any tax due on your bank/building society interest via your PAYE code, be warned. For the 2023/24 tax year, HMRC received around 130 million automatic reports of interest, but could only match 80% of them to taxpayers, a job that was not finished until March 2025. The taxpayer is responsible for paying the correct tax and HMRC is now reminding those who have not received a coding adjustment, they need to report any taxable 2023/24 interest ASAP.

Half a century ago…

In April, a 50th anniversary passed, largely unnoticed. April 1975 was the last time that the basic rate of tax was increased (from 33% to 35%). Ever since the only direction for the basic rate has been down. That is not quite as good news as you might think as it has prompted successive Chancellors to raise revenue in different, less obvious, ways. The most recent example is the freezing of tax bands and allowances to create an ever growing band of higher-rate taxpayers.