As part of its ongoing efforts to modernise and simplify the UK tax system, HMRC has announced a series of significant tax and administrative updates. These changes, unveiled in the Spring 2025 tax update, are set to impact employers and taxpayers alike.
In our latest blog, we provide a summary of the developments you need to be aware of:
Mandatory payrolling of benefits in kind delayed to April 2027
In a move welcomed by many, the mandatory payrolling of benefits in kind (BIKs) has been postponed by a year. Originally scheduled for April 2026, the requirement will now come into effect on 6 April 2027, giving stakeholders additional time to adapt their systems and processes. Find out more in our blog.
Self Assessment threshold changes set to simplify tax for many
A major simplification to Income Tax Self Assessment (ITSA) rules will see thresholds aligned across income types. From the 2025/26 tax year, individuals with trading, property, or other taxable income under £3,000 will no longer be required to file a Self Assessment tax return. This change is expected to remove up to 300,000 taxpayers from the system. Where a liability to tax still arises, there would of course still be an obligation to file a self-assessment return.
CEST tool improvements from 30 April 2025
An updated version of the Check Employment Status for Tax (CEST) tool will be introduced from 30 April 2025. The improvements are designed to enhance usability and provide clearer, more consistent guidance to help businesses and contractors determine employment status more accurately.
NICs elections simplified from May 2025
From 1 May 2025, a new National Insurance Contributions (NICs) election template for employment-related securities will be available. Employers using the new template will no longer need prior approval from HMRC, helping to reduce administrative delays.
Capital Goods Scheme streamlined
As part of the ongoing simplification of VAT administration, the Capital Goods Scheme will undergo two key changes:
- Computers will be removed from its scope.
- The threshold for land and buildings will increase to £600,000.
These changes aim to reduce compliance burdens, particularly for smaller businesses.
Transfer pricing consultations open
Two consultations aimed at reforming the UK’s transfer pricing rules are now open and will run until 7 July 2025. The proposals seek to improve clarity, align with international standards, and increase transparency in cross-border tax matters.
Vaping Duty and Stamp Scheme coming into force next year
From 1 October 2026, a new Vaping Duty Stamp Scheme will be introduced alongside the Vaping Products Duty. Manufacturers and importers of vaping products will face new compliance requirements to ensure proper regulation of this growing market.
Dispute Resolution reforms under review
HMRC is currently consulting on proposed reforms to tax dispute resolution, focusing on earlier and more effective resolutions. These changes may improve outcomes for taxpayers and reduce prolonged litigation.
Digital communications to replace most post from June 2025
Beginning in June 2025, HMRC will phase out most non-statutory postal communications in favour of digital delivery. While this change promotes efficiency and cost savings, HMRC has committed to retaining paper-based communications for essential and digitally excluded users. Whilst a move to digital communications is not a surprise, it will be interesting to see how HMRC address issues in relation to cyber-security and fraudulent contact, much of which comes through electronic communications at the moment.
Get in touch
These announcements reflect HMRC’s broader goal of modernising the UK tax system while reducing compliance burdens. Whether you’re an employer managing payroll or an individual taxpayer, it’s a good time to assess how these changes may affect your responsibilities.
To prepare effectively, early planning is essential. If you need support, get in touch with one of our expert tax advisers by emailing enquiries@pmm.co.uk.
