HMRC have published their Agent Update for April 2025. We have summarised the key content with links to our detailed guidance on the topics covered. This month's update includes PAYE Settlement Agreement (PSA) determinations for 2023-24 and the latest on reporting company appointments for the Corporate Interest Restriction (CIR).
Self Assessment repayments are no longer available through telephone or webchat
On 27 March 2025, HMRC paused the issuing of Self Assessment repayments for new claims over the telephone (including the Agent Dedicated Line) and through webchat until further notice.
- This is part of enhanced security controls in response to increasing suspected fraudulent repayment attempts.
- Agents can continue to claim client refunds online through their agent account.
- Agents who are unable to access their online account are advised to contact HMRC's Online Services Helpdesk.
- The digitally excluded will need to apply by post.
- If taxpayers contact HMRC directly, they will be advised that the best way to claim refunds is online through their online tax account or via their agent.
- Telephone and webchat can continue to be used for all other Self Assessment enquiries.
See Security concerns halt HMRC phone repayments for SA
Overdue PAYE Settlement Agreement (PSA) calculations
HMRC are raising determinations for employers who have failed to meet their PSA obligations for the tax year ending 5 April 2024.
- Copies of the Notice of Determination will be sent to authorised agents.
- Affected employers should read the ‘Notice of Determination’, and if it is:
- Correct, pay the total amount due.
- Wrong, appeal.
See PAYE Settlement Agreements
Capital Gains Tax (CGT): work out adjustments for 2024-25
CGT rates changed during 2024-25. Individuals, trustees and personal representatives will need to take additional steps to calculate their CGT if they made disposals on or after 30 October 2024.
- This will ensure the new tax rates are correctly accounted for in the 2024-25 Self Assessment return.
- Adjustments are not required for: residential property, Business Asset Disposal Relief, Investors Relief or carried interest.
See HMRC's new 2024-25 CGT 'adjustment' calculator
Changes to company size thresholds for Off-Payroll Working (OPW)
On 6 April 2025, the small company thresholds used for determining whether a business needs to deduct tax under the OPW rules changed.
- HMRC have now updated the Employment Status Manual at ESM10006A, which provides details about the changes in the small company threshold and how it impacts OPW.
- In most cases, the changes will not have a practical effect for engagers of off-payroll workers until the tax year beginning on 6 April 2027.
See Off-Payroll Working: PSCs & Private Sector Engagers
Expanding the cash basis
From 6 April 2024, there were several changes to cash basis accounting. It has now become the default method of accounting for most unincorporated trading businesses.
- If businesses wish to use traditional accounting (accruals basis) to report their profits for tax purposes, they will need to opt out of the cash basis when submitting their Self Assessment tax returns for the tax year 2024-25 and subsequent tax years.
- Businesses excluded from using the cash basis should indicate this on their tax return each year by ticking the relevant box.
See Cash or accruals accounting toolkit
Taxation of non-UK domiciled individuals from 6 April 2025
Globally mobile employees
- Operating PAYE on a reduced amount of a globally mobile employee’s earnings has changed. Any HMRC directions that were issued before 6 April 2025 will have ceased to have effect.
- Section 690 ITEPA 2003 has changed. The process of applying for an HMRC direction has ceased.
- A new process allows employers and their agents to send HMRC a notification advising that a proportion of income paid to a globally mobile employee, or a treaty non-resident, will be treated as not being PAYE income.
See Employer Bulletin: April 2025
Inheritance Tax (IHT) moves to a residence-based system
- The new IHT regime affects the scope of property brought into IHT for individuals and settlements.
- The test for whether non-UK assets are in scope for IHT is whether an individual has been resident in the UK for at least 10 out of the last 20 tax years immediately preceding the tax year in which the chargeable event (including death) arises.
Four-year Foreign Income and Gains (FIG) regime
- Individuals who are qualifying new residents in the UK will get 100% tax relief on eligible FIG during their first four years of being UK resident. This is known as the ‘four-year FIG regime’.
- This regime only applies to individuals who have not been UK tax resident in the 10 tax years immediately before their arrival.
See Non-Domicile: Rules from 6 April 2025
Overseas Workday Relief (OWR)
- Employees will continue to be able to claim relief on their foreign employment income earned during tax years in which they are eligible for OWR.
- OWR will now be available for foreign employment income earned in the first four tax years of UK tax residence.
See Overseas Workday Relief (OWR)
Corporate Interest Restriction (CIR): appointment of a reporting company by HMRC
Background
- CIR allows groups to appoint a reporting company, which facilitates the administration of the rules, including the filing of Interest Restriction Returns (IRRs) for the group.
- HMRC published guidance in September 2024 on the situations in which they will appoint a reporting company on behalf of a group.
- Following concerns being raised, HMRC are changing their approach for certain periods ending on or before 31 March 2024.
Periods where HMRC was still in time to appoint a reporting company on 31 March 2025
- For periods where HMRC were still in time to appoint a reporting company on 31 March 2025, HMRC will not pursue the specific point that failure to validly appoint a reporting company would invalidate the filed IRRs.
- This applies to periods ending on or after 31 March 2021 and on or before 31 March 2024.
- It also includes some earlier periods where HMRC have an open Corporation Tax Self Assessment enquiry for a company in the group for the period.
Practical steps
- Where HMRC are currently corresponding with a group about the reporting company status for those periods, HMRC will be contacting the group soon.
- Where groups have previously accepted that HMRC would not appoint a reporting company on behalf of the group, they can approach HMRC, and they will work with the group on this. HMRC only expect groups to make contact where there is a tax impact.
- Groups should not approach HMRC on a ‘just in case’ basis. HMRC will not appoint a reporting company for a group unless they have previously contacted the group to highlight an issue with, or absence of, an appointment.
- The updated approach is on the specific point of whether there is a valid reporting company appointment. HMRC may still use their compliance powers to make sure the numbers in the IRR are correct.
- Where HMRC are looking to open an enquiry, they may ask about the reporting company for the group and, where necessary, appoint a reporting company ahead of opening an enquiry.
Periods ending before 31 March 2021
- HMRC are still considering their position for cases where they have identified that no reporting company has been appointed, but as of 31 March 2025, HMRC no longer had the power to appoint a reporting company.
- HMRC are not specifically looking to enquire into issues about reporting company status for these periods, and continue to consider the position for such cases.
Periods ending after 31 March 2024
- The updated approach only applies to periods ended on or before 31 March 2024.
- For later periods, groups should ensure they have a valid reporting company appointed before they submit an IRR. The guidance in CFM98485 continues to apply for these periods.
- Where a group has established that the status of its reporting company is uncertain, HMRC advise that the group submit a new valid reporting company appointment to put the issue beyond doubt.
- If the group wishes to appoint a different group company to the company that has previously submitted IRRs, they should first revoke the appointment of the previous reporting company.
- HMRC will not view the appointment of a reporting company for a period ending after 31 March 2024 as any indication or admission that there was not a validly appointed reporting company for previous periods.
See Corporate Interest Restriction (CIR)
Making Tax Digital for Income Tax (MTD for IT)
Under MTD for IT, taxpayers will need to use MTD compatible software to keep up-to-date digital records and send closer to real-time updates of income and expenses to HMRC each quarter. They will then need to submit their end-of-year tax return.
- MTD for IT will be introduced in phases from April 2026. Taxpayers with gross income from self-employment and property over:
- £50,000 will need to use MTD for IT from April 2026.
- £30,000 will need to use MTD for IT from April 2027.
- £20,000 will need to use MTD for IT from April 2028.
- You can Sign up clients for testing now. You will be asked some questions to confirm whether your client is eligible. To take part in testing, you will need to be registered with HMRC for an agent services account.
- HMRC's agent toolkit has more information and resources for MTD for IT.
Multiple agents
- Newly introduced functionality enables MTD for IT taxpayers to authorise multiple agents to act on their behalf at the same time (e.g. a bookkeeper and an accountant). There are two agent roles.
- Main agents have full access to MTD for IT services and will be able to see and do everything that their client can online, with a few exceptions.
- They will have the same access to MTD for IT services as existing agents.
- Taxpayers can only have one main agent at any given time.
- Supporting agents have restricted permissions and can only undertake certain MTD for IT services on their clients' behalf.
- They can only interact with HMRC on a client’s behalf for sole traders and property businesses.
- Taxpayers can have one or more supporting agents.
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 is entitled to tax credits at a rate of 45% for touring productions and all orchestral productions, and 40% for non-touring productions.
- These rates apply to all productions, regardless of the date they begin production.
- European Economic Area (EEA) expenditure no longer qualifies for relief. Relief is based on UK expenditure.
See Museum & Gallery Exhibitions Tax Relief (MGETR), Orchestra Tax Relief (OTR) and Theatre Tax Relief (TTR)
Changes to the claims process for the creative industries tax reliefs
Companies claiming creative industry tax reliefs must complete an Additional Information Form (AIF) in support of their claims, on the same day or prior to submitting their CT600 Tax Returns.
- HMRC launched an updated version of the AIF on 1 April 2025.
- This includes 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 are also new boxes on the CT600 for claims to AVEC or the Video Games Expenditure Credit.
- 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 (AVEC) for visual effects costs and independent films
From 1 April 2025, film and TV production companies can claim enhanced AVEC for visual effects (VFX) costs incurred on films (excluding animated and independent films) and high-end TV programmes.
- Costs must be incurred on 1 January 2025 and thereafter 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.
From 1 April 2025, film production companies can claim 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 a 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)
Tips for communicating with HMRC via post
To avoid delays when sending something to HMRC by post, HMRC recommend using the following tips to ensure your mail reaches the right place and can be scanned/processed smoothly:
- Use the right address and full postcode on the envelope so it reaches the right place.
- Include taxpayer identifiers: add your client’s name, National Insurance number and Unique Taxpayer Reference (if they have one) on the first page, ensuring they are clear and prominent.
- Add the key topic on the front page to help direct it to the right team after being scanned.
- Only include necessary documents.
- Staple documents together to ensure pages do not separate and merge with other taxpayer information.
- Avoid using ‘complaint’, unless it’s a complaint. Complaints are diverted to the complaints team and not to a processing area, which may cause delays.
- Do not send multimedia such as USB sticks, hard drives or other digital media unless specifically requested.
- Include a clear and complete return address for valuable items.
- Use registered or recorded delivery. HMRC do not sign for it when it arrives, but will scan the barcode and add it to their internal tracking system for a full audit trail.
- Check that forms are complete, correct and signed.
Student loans thresholds, rates and loan start notices
See Employer Bulletin: April 2025
Changes to employer National Insurance Contributions (NICs)
See Employer Bulletin: April 2025
Paying PAYE and VAT by Direct Debit
See Employer Bulletin: April 2025
Closing in on promoters of marketed tax avoidance
In March 2025, the Government launched a consultation seeking views on a range of new measures to close in on promoters of tax avoidance. The consultation closes on 18 June 2025, and views are sought on proposals in four areas, including:
- Expanding the scope of the Disclosure of Tax Avoidance Schemes (DOTAS) regime.
- Introducing a universal stop notice and promoter action notice.
- Tackling controlling minds and those behind the promotion of avoidance schemes through new targeted obligations and stronger information powers.
- Exploring options to tackle legal professionals designing or contributing to the promotion of avoidance schemes.
See Consultation on closing in on promoters of tax avoidance
Enhancing HMRC’s ability to tackle tax advisers facilitating non-compliance
HMRC are running a consultation on options to enhance HMRC’s powers and sanctions and take swifter and stronger action against professional tax advisers who facilitate non-compliance in their clients’ tax affairs. The consultation closes on 7 May 2025.
See Consultation on tackling tax advisers facilitating non-compliance
Research and Development advance clearance consultation
The Government has published a consultation on potentially widening the use of advance clearances in Research and Development (R&D) tax credits.
- The consultation, which closes on 26 May 2025, seeks views on potential options for a revised system of advance clearances to reduce error and fraud in the R&D reliefs, provide certainty to businesses, and improve the customer experience.
See R&D consultation on advance clearance procedure
Updates to the Tax Agents' Handbook
HMRC have made various updates to their Tax Agents' Handbook.
Protecting taxpayer data against malware
Malicious software or ‘malware’ is any software intentionally designed to cause harm. Malware can steal, alter, or delete the data on an infected device.
- As a tax agent, you are an attractive target for criminals.
- If your device becomes infected, a criminal may have access to everything you use it for, including your Agent Online Services Account (AOSA) or Agent Services Account (ASA).
- Malware, introduced by hidden Remote Access Trojans (RATs), can take the form of email attachments, malicious links or downloads.
- To help protect devices and client information, you should: ensure software is regularly updated and receives security updates; keep antivirus protection up to date; avoid following links or downloading attachments in suspicious or unexpected emails; use strong passwords.
If you believe your agent account has been suspended or compromised:
- HMRC monitors transactions on accounts for suspicious activity. If HMRC believe an AOSA or ASA has been compromised, they may immediately suspend that account without notice to prevent further criminal access.
- HMRC will then write to you to advise you on the next steps to take.
- If your account has been suspended, you'll be unable to log in or reset your password.
- If you have not received a letter with the next steps to take, you can call 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.
Update on UK implementation of Multinational Top-up Tax and Domestic Top-up Tax
HMRC's fourth direct update to groups believed to be within the scope of the new Pillar 2 taxes was issued during the week commencing 31 March 2025.
- This includes details of upcoming webinars and a reminder that all businesses in the scope of Pillar 2 taxes must register using HMRC's Pillar 2 online service, even if the group does not think it will have to pay top-up tax.
- If a qualifying group does not register on time, it may be liable for a penalty.
- Only the filing member for the group can use the online service. Agents cannot register on a group’s behalf.
- Further information on the direct update can be found in HMRC's Agent Update (see External link below), including details of the reporting obligations on the filing member.
Get ready for the new arrangements for moving goods from Great Britain to Northern Ireland under the Windsor Framework
Following the guidance issued in September 2024, there has been extensive preparatory work undertaken for the new arrangements for the movement of goods from Great Britain to Northern Ireland by parcels or freight set out in the Windsor Framework.
- Subject to the relevant procedures, the new arrangements of the Windsor Framework are planned to take effect from 1 May 2025.
- For business-to-business parcel movements, there are new processes that traders will need to follow to ensure goods move quickly and smoothly. For existing freight movements, HMRC are introducing new simplified processes which traders may wish to take advantage of.
- HMRC have set out key information about these arrangements and actions your clients may need to take. See HMRC's Agent Update (see External link below)
External link