Spring Tax Update

The Government’s announcements in its Tax Update Spring 2025

Article Type:  News

Created: 30/04/2025 08:00:00

On 28 April the Government published, Tax update spring 2025: simplification, administration and reform summary. This appears to be the new name for the previous Tax Administration and Maintenance Day. Key measures announced include: 

Payrolling of benefits in kind pushed back to 2027 

The Government has announced a delay to the mandation of payrolling of income tax and Class 1A national insurance contributions (NIC) on benefits, after feedback from external stakeholders. Originally, this was set to come into effect on 6 April 2026. However, the mandating of payrolling benefits will now be introduced on 6 April 2027.  

For most benefits in kind and expenses, income tax and Class 1A NICs will need to be reported through Real Time Information (RTI) and paid in real time from 6 April 2027.  

Employers will also be able to payroll employment-related loans and accommodation on a voluntary basis from 6 April 2027. There are some less common cases, such as tax award schemes and third-party benefits, which are not covered in HMRC’s Policy Paper. HMRC says that it will provide an update on these cases later in the year. 

CEST 

Another one of the key measures announced was the news that HMRC is revising the Check Employment Status for Tax (CEST) digital tool. The changes, which are set to be introduced from 30 April 2025, are said to “make it easier for CEST’s users to use the tool”.  

"To support these changes, HMRC will also publish revised guidance that offers help on how to answer the revised questions. HMRC is committed to standing behind the outcomes of this tool where it has been used correctly." 

The CEST tool is intended to give the user HMRC’s view of a worker’s employment status, based on the information provided (usually for the purposes of ascertaining if the are caught by IR35/the off payroll working rules). It can also be used to check if changes to contractual terms or working arrangements may alter a worker’s employment status.  

Employer’s NICs 

In a measure announced as a simplification, the Government has announced that an employer can transfer an employer’s NICs liability to an employee who acquires employment related securities such as shares from the employer, in certain circumstances. 

HMRC says: "This measure will simplify the process to make a joint election to transfer the liability, by removing the requirement on the employer to submit the election form to HMRC for pre-approval, where the employer is using the election form template on GOV.UK." This measure will come into force from 1 May 2025. 

Reviewing NICs annual maximum refunds process 

The Government will review the process for refunding NICs under the annual maximum rules. Currently, individuals who pay more than they are liable for can make a claim for a refund from HMRC at the end of the tax year. The Government says that it will review the process to make it easier and faster for individuals to access the refunds they are entitled to. 

Voluntary NICs — enhancing the check State Pension forecast service  

The Government has announced it intends to further enhance the check your State Pension forecast service, which supports people who want to make payments for voluntary NICs to fill gaps in their NICs record. 

Income tax self-assessment criteria review 

The income tax self-assessment reporting thresholds for trading, property and ‘other taxable’ income will be aligned and changed to £3,000 (gross) each. This will remove the requirement for up to an estimated 300,000 taxpayers to submit a self-assessment return, so that taxpayers are only required to do so where necessary. 

People’s tax liability will not change, but people with taxable income below these new thresholds will be able to report their income through a new digital reporting service. Taxpayers will have a choice. They can remain in self-assessment if they wish or use the new service. 

The changes will take place within this Parliament, with further detail set out on publication of the transformation roadmap later this year.