HMRC have published their Agent Update for February 2025. We have summarised the key content with links to our detailed guidance on the topics covered, including 2025-26 ATED returns, the Official Rate of Interest from 6 April 2025, changes to Employer's National Insurance and the Employment Allowance.
Submitting 2025-26 Annual Tax on Enveloped Dwellings (ATED) returns
Annual Tax on Enveloped Dwellings (ATED) is a tax on companies and other non-natural bodies that own UK residential properties valued at more than £500,000.
- The next ATED chargeable period is from 1 April 2025 to 31 March 2026.
- For properties held on 1 April 2025, returns for this period must be filed and any tax charge must be paid by 30 April 2025.
- It is possible to start populating an online ATED return for 2025-26 from around mid-March 2025, but you cannot submit it before 1 April 2025.
- When preparing to send a 2025-26 ATED return, you must use the same login you used to set up your ATED online account.
- Ensure clients regularly log in to their Government Gateway account as if they do not sign in for three years, their account details will be deleted and they will lose access.
- If a client has disposed of a property, you should submit an amended return or contact HMRC about the change. You should also contact HMRC if your client has had a change in their circumstances, for example, they no longer need to file a relief return.
See Annual Tax on Enveloped Dwellings (ATED)
The Official Rate of Interest from 6 April 2025
The Official Rate of Interest (ORI) is used to calculate the Income Tax charge on the benefit of employment-related loans and the taxable benefit of some employment-related living accommodation.
- As of 6 April 2025, the ORI may increase, decrease, or be maintained throughout the year.
- This is a change to the previous public commitment not to increase the rate during the tax year that was made in January 2000.
- From 2025-26, the ORI will be reviewed quarterly. If there are any changes to the rate, these will take effect on 6 April, 6 July, 6 October and 6 January.
- Future changes to the ORI will be published on GOV.UK and employers must ensure they are aware of any changes in the rates.
Changes to employer National Insurance Contributions (NICs)
Changes to employer NICs take effect from 6 April 2025:
- The employer Class 1, Class 1A, and Class 1B NICs rates increase to 15%, from 13.8%.
- The Secondary Threshold (the point at which employers start to pay employer NICs) decreases from £9,100 to £5,000 per year.
Employment Allowance (EA) eligibility and further guidance
The EA is currently restricted to employers with NIC liabilities of less than £100,000 in the previous tax year. This changes from 6 April 2025, when:
- The £100,000 threshold will be removed.
- The maximum amount of EA will increase from £5,000 to £10,500.
- The abolition of the £100,000 EA threshold means that, from 6 April 2025, employers will no longer need to consider State Aid where they had done so because of the threshold restriction.
Changes to 2024-25 in-year returns for Trusts and Estates
Trustees and Personal Representatives (PRs) have previously been able to file in-year Self Assessment Returns (SA905) using the previous tax year's form under ‘a collection and management measure’.
- Due to the in-year change to the rates of Capital Gains Tax (CGT) announced for 2024-25, for taxpayers with disposals on or after 30 October 2024, a manual workaround will be required to ensure the new rates of tax are correctly accounted for in the return.
- This will involve using an adjustment box that has been added to the SA905 to account for the in-year difference in tax.
- Use of the 2023-24 tax return for 2024-25 will cause an issue for some taxpayers, as the return cannot capture the two rates of CGT. As a result, HMRC cannot accept some in-year returns.
- In-year returns (2024-25) that HMRC can accept are those that have:
- UK property disposals only.
- Any disposals made before 30 October 2024
- HMRC cannot accept any in-year returns with multiple main rates of CGT for disposals on or after 30 October 2024, until the 2024-25 return is available in April 2025.
- Returns that have already been sent will be returned to trustees or PRs.
- An adjustment tool will be available alongside the updated 2024-25 return to support a trustee or PR to calculate the correct adjustment figure.
See Trusts & Estates: What’s New 2024/25
Basis Period Reform
All sole traders and partners must report their business profits on a tax year basis for 2024-25 onwards.
- If you applied to HMRC to request an overlap relief figure (using HMRC's overlap relief figure tool) for your client on or before the filing deadline of 31 January 2025, but did not receive a response and have still not filed the return, you still have until 28 February 2025 to file it with a provisional figure (or final figure if known).
- You will not incur a late filing penalty, although interest will still accrue from 1 February 2025 on outstanding amounts of tax.
- The return should then be amended once the final figure is known. Note that tax can be paid without filing and amounts paid will reduce any interest charged.
Making Tax Digital (MTD)
Sole traders and landlords who have a total income from self-employment and property of over £50,000 in their 2024-25 Self Assessment tax return will need to use MTD for Income Tax from 6 April 2026, unless exempt.
- From April 2025, HMRC will write to taxpayers whose 2023-24 Self Assessment tax return shows their income from these sources was close to, or over, £50,000. This letter will let them know that they may need to use MTD for Income Tax.
- If any of your clients are affected by this change, they must be signed up for MTD for Income Tax by April 2026.
- You may also be able to sign up your clients now. From April 2025, you will see two sign up options:
- Option 1 is to sign up now for the 2025-26 tax year. This will give access to HMRC’s MTD Customer Support Team.
- Option 2 is to sign up for the 2026-27 tax year.
- HMRC is hosting a series of MTD for Income Tax events at their offices across the UK this year, running from 11 am to 3 pm.
- Registration is now open for events in Newcastle (9 April), Stratford (29 April), and Cardiff (7 May).
- Spaces are limited. If you are interested in attending, email
This email address is being protected from spambots. You need JavaScript enabled to view it. and tell HMRC which event you would like to attend.
See MTD: Toolkit for accountants
Guidelines for Compliance: Help with labour supply chain assurance (GfC12)
HMRC has recently published new Guidelines for Compliance: Help with labour supply chain assurance (GfC12).
- The guidelines are designed for larger organisations in the top tiers of a labour supply chain but the principles can be applied to most businesses.
- The guidelines will help taxpayers identify and limit the impact of risks by:
- Explaining what labour supply chains are and the associated risks.
- Promoting the importance of effective labour supply chain assurance.
- Providing practical advice to consider when carrying out labour supply chain assurance.
Managed Service Companies (Spotlight 67): new guidance
On 21 November 2024, HMRC published Spotlight 67 on Managed Service Companies (MSCs) to help taxpayers identify and understand MSC arrangements.
See Spotlight 67: Managed Service Companies (MSC)
Expanding the cash basis
From 6 April 2024, the cash basis becomes the default method of accounting for trading businesses.
- The previous turnover limit, loss relief and interest relief restrictions are removed for 2024-25.
- If businesses wish to use traditional accruals accounting or are excluded from using the cash basis, they will need to opt out of the cash basis when submitting their 2024-25 and subsequent tax returns.
See Cash or accruals accounting toolkit
Statutory Neonatal Care Leave and pay
The government intends to introduce a new statutory entitlement to Neonatal Care Leave and pay from 6 April 2025.
- This will provide employed parents whose babies are admitted to neonatal care with day-one employment right to take up to 12 weeks off work, depending on how long their baby is in neonatal care. Eligible parents will also be entitled to up to 12 weeks of statutory pay.
- Further details can be found in Agent Update 128.
Agent Services Account (ASA): sign up to test HMRC's new ‘Access Groups’ feature
HMRC are inviting agents to help test the Access Groups feature in the ASA. This functionality allows agencies to control which agents in their organisation can view and manage specific client records.
- Since September 2022, HMRC have been testing this feature with agents managing fewer than 1,000 clients.
- HMRC are now expanding the private beta to include agents with larger client lists (over 1,000 clients).
- When you join the private beta, HMRC will enable Access Groups in your ASA. All HMRC ask is that you use the feature and share your feedback.
- To take part, email
This email address is being protected from spambots. You need JavaScript enabled to view it. with your organisation’s name and agent reference number.
Consultation on electronic invoicing
UK businesses are invited to have their say on the government’s electronic invoicing (e-invoicing) proposals.
- E-invoicing is the digital exchange of invoice information directly between buyers and suppliers.
- A 12-week consultation promoting electronic invoicing across UK businesses and the public sector was published on 13 February 2025 by HMRC and the Department for Business and Trade (DBT). The deadline for comment is 7 May 2025.
- HMRC and the DBT want to hear the opinions of self-employed people, businesses of all sizes, representative and industry bodies, charities and public sector organisations.
Alcohol Duty reforms
On 1 February, the new Alcoholic Products Producer Approval (APPA) legislation went live, replacing the previous alcohol production registrations and licenses with the APPA.
- New producers of alcoholic products can now apply online for approval.
- On 1 March, HMRC will launch the Manage your Alcohol Duty online service allowing alcoholic product producers to submit monthly returns and payments online, for the first time.
- During February 2025, producers approved under the previous alcohol production registrations and licenses will be migrated to an APPA. Letters should be received from HMRC by 25 February about this.
- The first return is due by 15 March 2025, for products released in February 2025. Payment must be cleared and received by HMRC by 25 March 2025.
- Further details can be found in Agent Update 128.
Windsor Framework: Trader Goods Profile public beta launched
HMRC have launched a public beta for the Trader Goods Profile (TGP) to help traders prepare for the new arrangements being introduced for moving goods from Great Britain to Northern Ireland as part of the Windsor Framework.
- The TGP is an online service available to UK Internal Market Scheme (UKIMS)-authorised traders that stores information about goods traders commonly move from Great Britain to Northern Ireland.
- Further details can be found in Agent Update 128.
Warehousekeepers and Owners of Warehoused Goods (WOWGR)
On 2 December 2024, HMRC published The Excise Duties (Miscellaneous Amendments and Revocations) Regulations 2024, which included amendments to the Warehousekeepers and Owners of Warehoused Goods (WOWGR) Regulations 1999.
- The changes come into force from 3 March 2025 and remove the registration requirements for Owner of Goods and Duty Representatives.
- Further details can be found in Agent Update 128.
Getting ready to continue making business-to-business post and parcel movements to Northern Ireland
Businesses should be fully prepared for the new arrangements under the Windsor Framework for parcels and freight movements by 31 March 2025.
- Businesses sending business-to-business (B2B) parcels from Great Britain to Northern Ireland are required to provide some information to their parcel carrier, and in certain cases, may need to pay duty (which can be reclaimed in certain situations).
- The UK Internal Market Scheme (UKIMS) gives access to the simplified process for moving goods from a business in Great Britain to a business in Northern Ireland without a full declaration and without incurring duty.
- Further details can be found in Agent Update 128.
Tax advice: do not get caught out by tax avoidance
HMRC's ‘Don’t get caught out’ campaign' helps contractors learn how to spot the signs of tax avoidance, including how to check their pay to make sure they are paying the right amount of tax.
Support for taxpayers who need extra help
HMRC have principles of support for customers who need extra help. These set out HMRC's commitment to support taxpayers according to their needs and underpin the HMRC Charter.
Contact
Complain about HMRC: To make a complaint to HMRC on behalf of your client you must be appointed as their tax adviser.
Where’s My Reply? for tax agents: Find out when you can expect a reply from HMRC to a query or request you have made. There is also a dedicated service for tax agents to:
- Register you as an agent to use HMRC Online Services.
- Process an application for authority to act on behalf of a client.
Manuals
Check the latest updates to HMRC manuals or subscribe to the automatic notification of changes.
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