Dear customer,
Today the Exchequer Secretary to the Treasury, James Murray, made a Written Ministerial Statement outlining a range of administration and simplification measures which will support our ambition to modernise the tax and customs system.
Measures announced today include a number of changes that employers may be interested in, and we have collated some of these below.
Information on all Tax update spring 2025: Simplification, Administration and Reform (TUSAR) measures can be found in the Tax update spring 2025 page on GOV.UK.
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Mandating the payrolling of benefits in kind |
HMRC will provide more time to prepare for the mandatory reporting of Income Tax and Class 1A NICs for most benefits in kind and taxable expenses from 6 April 2027, instead of 6 April 2026 as previously announced.
HMRC has published an updated technical note which provides more operational information on how employers can adapt to these changes in time for 6 April 2027.
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Check Employment Status for Tax (CEST) – updates to the digital tool |
HMRC is making its 'Check employment status for tax' digital tool easier for customers to use. We’ve listened to feedback and updated the tool’s questions to make them more accessible. These changes do not affect how the CEST tool determines if a worker is self-employed or employed.
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Employment related securities – employer’s National Insurance Contributions (NICs) elections process |
From 1 May 2025 the process to make a joint election will be simplified as you will no longer need to submit the election form to HMRC for pre-approval, where you’re using the new election form template on GOV.UK. The new pre-approved template which will be available to use from 1 May 2025, will ensure consistency and accuracy without the requirement to send it to HMRC for approval.
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Capital Goods Scheme simplification |
The government will bring forward legislation to simplify the VAT Capital Goods Scheme (CGS), reducing burdens for businesses by increasing the threshold for land, buildings and civil engineering work from £250,000 to £600,000 (exclusive of VAT) and also removing computers from CGS assets.
These changes will take effect at a later date within this Parliament.
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Consultations on transfer pricing |
The government has today published 2 consultations, which represent a balanced package of proposals on international tax reform.
The first, Reform of UK law in relation to transfer pricing, permanent establishment and Diverted Profits Tax, is a technical consultation on draft legislation.
The intention of the proposed reform is to simplify and update some of the UK’s international tax rules and align them more closely with the UK’s treaty obligations.
The second, transfer pricing: scope and documentation, is a policy consultation on 2 related proposals:
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| • | the first is to better define and defend the UK tax base by removing the exemption from transfer pricing for medium-sized businesses, whilst retaining an exemption for small businesses | | • | the second is to introduce a requirement for multinationals to report information on their cross-border related party transactions to HMRC through a new International Controlled Transactions Schedule (ICTS) – the ICTS would focus on objective and readily available information that will help facilitate better identification of transfer pricing risk and allow for more efficient, targeted compliance activity
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Both consultations are open for feedback until 7 July 2025.
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Consultation on the VAT treatment of business donations of goods to charity |
The consultation seeks to understand more about the types of goods most commonly donated, how they are distributed, and if there is scope to balance the need to prevent tax evasion with the need to avoid burdensome administrative requirements.
The consultation will seek views on the scope of a relief, eligible goods, and the design of its administration, among other topics. HMRC are keen to hear from a broad range of businesses and charities who make and receive donations.
The consultation is open for feedback until 21 July 2025.
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Improving HMRC’s approach to dispute resolution |
HMRC is inviting views on how it might resolve customer disputes earlier and more effectively.
The consultation focuses on the ease of access and use of HMRC’s alternative dispute resolution and statutory review processes, and includes the potential to simplify the appeals process by aligning our approach for direct and indirect taxes.
The consultation is open for feedback until 7 July 2025.
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Reducing postal outputs |
HMRC will move much of what it currently sends out by paper into a digital format saving £50 million in print and postage costs annually by the 2028 to 2029 tax year, whilst maintaining paper post provision for certain critical correspondence and for the digitally excluded.
Many of the letters being sent to customers can be accessed in the HMRC app or online services – giving people instant access to important letters and bringing down costs to taxpayers by saving on paper, print and carrier costs.
HMRC will work closely with stakeholders as they make these changes and ensure that those customers who are digitally excluded continue to receive the information and support they require.
You can opt to go paperless in the HMRC app to reduce the number of letters you receive from HMRC.
Information on all the TUSAR measures announced today can be found in the Tax update spring 2025 page on GOV.UK.
Yours faithfully
HM Revenue and Customs
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