On Monday 28 April, the Exchequer Secretary to the Treasury, James Murray, made a Written Ministerial Statement outlining a range of administration and simplification measures which support HMRC’s ambition to modernise the tax and customs system.
The key announcements from the statement include the following:
Employment taxes
- Payrolling of BIK: The start date for mandatory payrolling of BIK has been delayed by one year, to 6 April 2027. In addition, HMRC has published a technical note to provide more information on how employers can prepare for the changes. An exception to mandatory payrolling is made for loan and accommodation BIKs as they can be difficult to value within the tax year. The technical note indicates that payrolling of these BIKs will be possible on a voluntary basis from April 2027.
- Employment status: HMRC will revise its Check Employment Status for Tax (CEST) tool and update its guidance to make it easier to use with effect from 30 April 2025.
- Employment-related securities (ERS): From 1 May 2025, an employer making a joint election to transfer an ERS NIC liability to an employee will no longer need to obtain pre-approval from HMRC where the template election on GOV.UK is used.
- NIC annual maximum refunds: The government will review the process to make it “easier and faster” for individuals to claim a NIC refund after the end of the tax year.
Business taxes
- Corporate Interest Restriction: The government will consider options to simplify and improve the Restriction, in particular, the requirement for a group to nominate a reporting company.
- International tax: Following an earlier consultation on policy options in 2023, the government is consulting on draft legislation intended to:
- simply the rules for transfer pricing in a number of areas, including UK-to-UK transfer pricing, the participation condition, intangibles and financial transactions.
- bring the UK into line with the latest international consensus on both the definition of, and the attribution of, profits to a permanent establishment.
- repeal the Diverted Profits Tax and introduce a new charging provision for unassessed transfer pricing profits within the Corporation Tax rules.
Separately, the government is consulting on proposals to remove the transfer pricing exemption for medium-sized enterprises, and introduce a new filing requirement relating to a business’s cross-border related party transactions
Personal taxes
- Self assessment criteria: Aligning the online thresholds used to determine whether an individual needs to complete an Income Tax self assessment tax return at gross income of £3,000 for trading income, property income and other taxable income.
This measure only applies to the reporting of income, not to the calculation of tax liabilities.
VAT and customs duties
- Capital Goods Scheme: Simplifying the scheme by removing computers from the assets covered by the scheme and increasing the capital expenditure value of land, buildings and civil engineering work from £250,000 to £600,000 (exclusive of VAT).
Tax administration and compliance
- Dispute resolution: The government is seeking views on ways to modernise and improve HMRC’s approach to dispute resolution. The main areas under consideration are HMRC’s alternative dispute resolution and statutory review processes.
- Tackling non-compliance. The government has published its response to the October 2024 consultation on how HMRC addresses non-compliance. The government says that HMRC will further consider reform of revenue correction powers and approaches to taxpayer self-correction.
- Valuation Office Agency (VOA): The functions of the VOA will be integrated with HMRC by April 2026.
- HMRC guidance and communications. Various measures, including simplification of the language used in letters and the reduction of paper post, by investing in digital services.
Please contact your usual DSG team if you would like to discuss the potential impact of these measures for you and/or your business.