HMRC have published their Agent Update for March 2025. We have summarised the key content with links to our detailed guidance on the topics covered, including changes to company size thresholds for Off-Payroll Working, reporting payrolled benefits for self-assessment and student loan purposes, and changes to the claims process for Creative Industries Tax Reliefs.
Self Assessment student loan repayments and payrolled Benefits In Kind
From 2024-25, a new box has been added to the Self Assessment tax return for reporting payrolled Benefits In Kind (BIKs) that are subject to Class 1A National Insurance Contributions (NICs) only. This is for student or postgraduate loan purposes.
- Student or postgraduate loan repayments are not due on BIKs taxed through payrolling that are subject to Class 1A NICs only.
- HMRC use total Pay As You Earn (PAYE) income declared on the tax return to calculate student loan repayments. However, where this figure includes payrolled BIKs, student or postgraduate loan repayments would, consequently, be calculated incorrectly.
- This new box separately identifies payrolled BIKs subject to Class 1A NICs only for 2024-25 onwards ensuring loan repayments are correctly calculated.
- For 2023-24 and earlier tax returns, refer to Agent Update 112.
See Agent Update 112: September 2023
Changes to company size thresholds for Off-Payroll Working
From 6 April 2025, the thresholds to determine if a company is classified as ‘small’ will change.
- For accounting periods beginning on or after 6 April 2025, a company will be considered small if two out of the three following conditions are met:
- Turnover of not more than £15 million (increased from £10.2 million).
- Balance sheet total of not more than £7.5 million (increased from £5.1 million).
- Monthly average number of employees no more than 50 (no change).
- A large or medium-sized client is responsible for determining the employment status of any worker supplying their services through an intermediary, usually a Personal Service Company.
- The threshold changes will have no practical impact on Off-Payroll Working until 6 April 2026, at the earliest, because a company’s size is determined by reference to previous years.
See Off-Payroll Working threshold increase and Off-Payroll Working: PSCs & Private Sector Engagers
The Official Rate of Interest from 6 April 2025
The Official Rate of Interest (ORI) will increase from 2.25% to 3.75% on 6 April 2025.
- The 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 announced in the Autumn Budget 2024, the ORI may increase, decrease or be maintained following quarterly reviews. If there are any changes to the rate, these will take effect on 6 April, 6 July, 6 October and 6 January.
- Any taxpayers potentially affected should remain aware of changes in the ORI as they occur.
Repeal of the Furnished Holiday Letting (FHL) regime
From 1/6 April 2025, FHL properties will form part of a company or individual’s (as relevant) UK or overseas property business and subject to the same rules as non-FHL property businesses.
- This is due to the abolition of the FHL regime, which will have a wide number of tax implications. A series of transitional rules apply.
See Furnished Holiday Letting (FHL): Abolition of the regime briefing
Extension of NICs relief for hiring veterans
The employer NICs relief for employers hiring qualifying veterans has been extended for a further year from April 2025 until 5 April 2026.
- Businesses will continue to pay no employer NICs up to annual earnings of the Veterans Upper Secondary Threshold of £50,270 for the first year of a veteran’s employment in a civilian role.
See Employers' NICs relief for veterans
Making Tax Digital (MTD)
Sole traders and landlords who have gross income from self-employment and property that totals over £50,000 in their 2024-25 tax return, will need to use MTD for Income Tax from April 2026.
- Taxpayers are currently able to sign up for voluntary MTD testing.
- From April 2025, HMRC will write to taxpayers whose 2023-24 tax return shows their total income from self-employment and property was close to, or over, £50,000. This letter will let them know that they may need to use MTD for Income Tax from April 2026.
Advanced electronic signatures for R40, P87, and Married Allowance Transfer Claim form (MATCF) print and post repayment claims
From 6 April 2025, tax advisers who use nominations for the P87, R40, or MATCF print and post forms to claim repayments on behalf of a taxpayer must use an advanced electronic signature service.
- The signature for each claim will be valid for a period of six months from the date of signing.
- An advanced electronic signature is a specific type of digital signature that must:
- Be uniquely linked to the person signing the data in electronic form and be capable of identifying them.
- Give the person signing sole control of the signature data.
- Be able to detect any changes made to the signature data afterwards.
- The advanced electronic signature is the minimum standard of digital signature that will be accepted.
- Tax advisers will need to provide HMRC with evidence of their registration with an advanced electronic signature service provider.
- Claims will not be processed for tax advisers who do not provide this evidence.
- Once tax advisers have obtained advanced electronic signatures from their clients, they will need to resubmit any unprocessed forms.
- Handwritten (wet) signatures will only be accepted by exception if the client is digitally excluded and has discussed this with HMRC before signing the nomination.
- The client will need to do this by phoning HMRC’s helpline on 0300 200 3300 from 6 April. Tax advisers cannot do this on their client’s behalf.
Changes to tax reliefs for Theatres, Orchestras and Museum and Gallery Exhibitions
From 1 April 2025:
- Qualifying expenditure for Theatre Tax Relief, Orchestra Tax Relief and Museums and Galleries Exhibition tax relief will be entitled to tax credits at a rate of:
- 45% for touring productions and all orchestral productions.
- 40% for non-touring productions.
- These rates apply to all productions, regardless of the date they begin production and replace the former 25% and 20% regular rates and the temporary uplifted rates that applied to productions beginning on or after 27 October 2021.
- From 1 April 2025, European Economic Area (EEA) expenditure will no longer qualify for relief, which will be based on UK expenditure only.
See Museum & Gallery Exhibitions Tax Relief (MGETR), Theatre Tax Relief (TTR) and Orchestra Tax Relief (OTR)
Changes to the claims process for the Creative Industries Tax Reliefs
Companies claiming Creative Industries Tax Reliefs must complete an Additional Information Form (AIF) in support of their claims, before or on the same day as submitting their CT600 Tax Returns.
- HMRC intends to launch an updated version of the additional information form on 1 April 2025, which will include new sections for companies to provide supporting evidence for claims to enhanced Audio-Visual Expenditure Credit (AVEC) for visual effects costs and independent films.
- There will also be new boxes on the CT600 for claims to AVEC or the Video Games Expenditure Credit (VGEC).
- The launch of the CT600P Creative Industries supplementary page has been postponed until April 2026.
- There is no requirement for companies to fill out a CT600P to make a valid claim.
- Companies should not attempt to complete it, even if their software allows them to.
Launch of enhanced Audio-Visual Expenditure Credit for visual effects costs and independent films
From 1 April 2025, film and TV production companies can make claims for enhanced Audio-Visual Expenditure Credit (AVEC) for visual effects (VFX) costs incurred on films (excluding animated and independent films) and high-end TV programmes.
- To qualify, costs must be incurred on or after 1 January 2025 and be spent on relevant VFX work carried out in the UK.
- Companies with qualifying costs can claim additional expenditure credit in the completion period of a production, or any later period.
Also from 1 April 2025, film production companies can make claims for enhanced AVEC for independent films (also known as certified low-budget films).
- To qualify for enhanced AVEC, films must:
- Start principal photography on or after 1 April 2024.
- Have core expenditure of £23.5 million or less.
- Either be an official co-production or have a UK lead writer or director.
- Companies can claim AVEC on qualifying films at a rate of 53%, on up to £15 million of core expenditure. The higher rate applies to costs incurred from 1 April 2024 only.
See Audio-Visual Expenditure Credit (AVEC) & Video Games Expenditure Credit (VGEC)
Research and Development (R&D) tax reliefs
The Autumn Finance Bill 2024 makes provisions for loss-making, R&D-intensive SMEs that have a registered office in Northern Ireland. These provisions take effect for claims made on or after 30 October 2024.
- Updates will be made on 1 April 2025 to the GOV.UK and HMRC’s Corporate Intangibles R&D Manual pages to explain these provisions and information that is required to make a claim.
- HMRC will incorporate the necessary declarations into the additional information form.
- This functionality is expected to be available in a few months.
- Companies wishing to submit their claim earlier can use the existing additional information form and HMRC will contact them to complete the process.
See Research & Development Tax Reliefs
Enhanced Research and Development Intensive Support (ERIS) and Northern Ireland ERIS scheme letters
HMRC will be contacting taxpayers who have made a claim for ERIS but do not appear to meet the eligibility criteria.
- HMRC will advise why they do not think they have met the criteria, how to check this, and what action to take next.
See R&D: SME Tax Credit scheme
HMRC’s new campaign helps customers ‘take the hassle out of their hustle’
HMRC has launched its new ‘Help for Hustles’ campaign to help those with side hustles get their tax right.
See Side-Hustles & Tax: At a glance
Combatting fraud and protecting taxpayer data
Agent Online Service Accounts (AOSAs) and Agent Services Accounts (ASAs) are often a target for fraudsters due to the access they can provide to multiple clients’ tax records.
- HMRC remind agents that to ensure passwords and sign-in credentials are secure, and also that any devices are free from malware.
- As well as choosing strong passwords, changing those passwords regularly, and ensuring anti-virus software is kept up to date, HMRC also recommend regular security check-ups with cyber security specialists, particularly if you have had issues in the past.
- HMRC monitors transactions on customer accounts for suspicious activity. Where HMRC believe an AOSA or ASA has been compromised, they may suspend that account without notice.
If you believe your agent account has been suspended:
- Contact HMRC’s Online Services Helpdesk on 0300 200 3600.
- They will initiate the process for unsuspending your account and will try to call you back within 72 hours to walk you through a password reset across all gateways and all third-party filing software.
- It is crucial to ensure all passwords have been reset and that devices are 100% free from malware. If the fraudsters retain even the smallest foothold, they could be back in your account within minutes.
- Depending on exactly what has happened, it may not always be possible to operate within these timescales. HMRC say it’s advisable not to contact other teams within HMRC as this will only slow the process down.
If you think your account has been compromised and want to report it to HMRC, contact HMRC’s Online Services Helpdesk
Freeport and Investment Zone special tax sites
On 26 February 2025, the remaining Investment Zone special tax sites in England were designated.
- The East Midlands Investment Zone special tax sites were designated following a Statutory Instrument which was laid on 5 February.
- Investment Zone proposals in Scotland, Wales, and the Enhanced Investment Zone in Northern Ireland will be provided in due course.
- From 6 April 2025, eligible employers operating in a designated special tax site who wish to claim the employer NICs relief will be required to provide the workplace postcode for each eligible employee within the RTI Full Payment Submission.
See Freeports and Investment Zones: Tax breaks and Investment Zones: Tax breaks
Update on UK implementation of Multinational Top-up Tax and Domestic Top-up Tax
HMRC will shortly issue a further direct communication to groups believed to be in the scope of the new taxes.
- These will be issued by email and by post during the week commencing 31 March 2025.
See BEPS & Diverted Profits Tax (for SME owners)
Celebrating 20 years of HMRC with the ICAEW and the CIOT
On 11 March, the Exchequer Secretary to the Treasury and Chair of HMRC’s Board, James Murray MP, set out his vision for HMRC as a modern and effective tax authority.
- Mr Murray reflected on the progress made on his three priorities of modernisation and reform, improving customer service and closing the tax gap, announcing new steps HMRC is taking to improve customers’ experience of the tax and customs system.
- These changes form part of HMRC’s broader transformation agenda, with further details expected in the HMRC Transformation roadmap which is due to be published in the summer.
See Side-hustle reporting threshold to treble
New service to resolve personal tax queries
On 31 March 2025, HMRC will launch a new service for agents, providing an escalation route for Self Assessment and PAYE queries for individuals that HMRC’s Agent Dedicated Line or Agent Webchat have not resolved.
- Agents can use the Personal Tax Query Resolution Service when they have:
- Checked the Where’s My Reply tool, with at least 20 working days having passed from the reply date given by the tool, and
- Tried at least twice to resolve the query by contacting the Agent Dedicated Line or Agent Webchat.
- Agents will be able to contact the service by emailing HMRC’s dedicated mailbox which can be found on GOV.UK from 31 March.
- In response to contacting HMRC’s dedicated mailbox, they will:
- Contact you within 48 hours to acknowledge the query.
- Provide an update every five working days.
- Aim to resolve your query within 20 working days, or make an action plan if they cannot.
- To help HMRC resolve queries within the set timeframe, they ask that agents:
- Provide all relevant information and documentation that HMRC request to help resolve the query.
- Respond promptly if HMRC ask for clarification or more information.
- Do not chase a query before the 20 working days have passed.
- Do not use the service to chase repayments, chase postal delays or queries relating to Making Tax Digital.
- Once the service is in place, HMRC will look at expanding it beyond PAYE and Self Assessment queries.
See Side-hustle reporting threshold to treble
Reserved Investor Fund
Legislation to bring the new Reserved Investor Fund (RIF) into law on 19 March 2025 has now been laid.
- The RIF is a new type of investment fund with lower costs and more flexibility than existing UK alternatives. It will be open to professional and institutional investors and is expected to be predominantly used for investment in real estate.
- The RIF rules will provide a seeding relief from Stamp Duty Land Tax (SDLT) for the transfer of property into the RIF, in exchange for units in the RIF, during a seeding period.
Help with common risks in transfer pricing approaches recorded webinar
You can watch a recorded webinar about help with common risks in transfer pricing approaches.
- The webinar is aimed at UK businesses who are subject to UK transfer pricing rules. It also supports external agents or firms that provide transfer pricing services to those businesses.
- The webinar covers the key points from the Guidelines for Compliance (GfC7).
Share your thoughts: HMRC umbrella company pay calculator testing
HMRC are asking for help to test their new calculator that estimates take-home pay for umbrella company workers, to improve the service before its full launch.
Income Record Viewer: examples of IT issues
HMRC have made some improvements to help users of the Income Record Viewer (IRV).
- Technical queries can now be raised about the information in the IRV.
- The facility can be accessed by clicking on the ‘is this page not working properly’ link that appears at the bottom of the page.
Missing PAYE codes
HMRC are continuing to investigate the issues relating to tax codes not being visible in the PAYE notice viewer and ask for current examples of where this issue has arisen, alongside any information to help investigate these cases.
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