Chancellor Rachel Reeves has options to adjust tax policies in the Spring Statement without violating Labour's election pledge to avoid raising taxes on working individuals. Experts from Blick Rothenberg suggest modifying payment rules for taxpayers under the Self-Assessment system, potentially lowering thresholds to require more taxpayers to make payments on account, thus increasing revenue. Additionally, increasing penalties for late submissions of Self-Assessment tax returns could also serve as a revenue-raising measure while remaining compliant with Labour's commitments.
Modifying the rules on payments on account would not directly increase the taxes payable by taxpayers, ensuring the government stays committed to not raising taxes on 'working people.'
The core late filing penalty of £100 has not changed since the late 1990s and could easily be increased to either £500 or £1,000.
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