Agent Update: May 2025

HMRC have published their Agent Update for May 2025. We have summarised the key content with links to our detailed guidance on the topics covered. This month's update includes changes to Corporation Tax reminders, HMRC beginning to issue 2024-25 Simple Assessment letters and a new compliance check guidance tool.

Changes to Corporation Tax reminders, statements and receipts 

HMRC are no longer sending paper copies of some Corporation Tax letters where taxpayers and agents can access the same information via online services.

• From June, HMRC will no longer automatically send the following non-statutory Corporation Tax letters:
  • CT205/A: return reminders for companies and agents.
  • CT207: interest statement.
  • CT209: payment receipt.
  • CT603A: agent list of issued notices to deliver Company Tax return.
  • CT608: instalment payment reminder.
• HMRC will also trial no longer sending Corporation Tax reminder letters (CT208) before they stop sending them permanently.
  • The trial will initially stop sending reminders to a small population of taxpayers with agents and, if successful, HMRC will increase this and eventually include the CT208 reminders to taxpayers. 
• There are no changes to the Corporation Tax process itself. Companies will still receive a notice to deliver a Company Tax Return. 

Personal Tax Query Resolution Service for Agents

HMRC have made further improvements to the Personal Tax Query Resolution Service for Agents, which launched on 31 March 2025. 

• The service is 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 now access the service using the Check when you can expect a reply from HMRC tool, instead of by email.
• Agents can use the Personal Tax Query Resolution Service through the ‘Where’s my reply tool’ when:
  • At least 20 working days have passed from the reply date given in the tool.
  • They have tried at least twice to resolve the query by contacting the Agent Dedicated Line or Agent Webchat.
  • They have not already initiated a complaint with HMRC related to the query.
• Once a query has been submitted, HMRC will:
  • Contact the agent within 48 hours to acknowledge the query.
  • Provide an update every five working days.
  • Aim to resolve the query within 20 working days or make an action plan if they cannot.
• HMRC ask that agents: 
  • Provide all relevant information and documentation asked for.
  • Answer the phone if a call from HMRC is expected. Ensure phone lines accept withheld numbers.
  • 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.

Employment-Related Securities (ERS): end-of-year return deadline

The deadline for filing annual ERS returns is 6 July 2025. Late filing penalties are charged where the deadline is missed.

• Returns, including nil returns, must be submitted for every scheme that has been registered.
• An ERS scheme needs to be linked to a live employer Pay As You Earn (PAYE) scheme.
  • If the PAYE scheme is being closed, the employer must tell HMRC if they are closing any ERS schemes.
  • Agents do not have the function to enter the date of the final event and close an ERS scheme.
• If a scheme has been registered in error or is no longer required, the employer should cease the scheme.
  • Once a scheme is ceased, an annual return must still be submitted for the tax year in which the final event date falls.

See Employment-Related Securities: Reporting

Issuing of Unique Taxpayer References over the phone

HMRC are no longer providing Unique Taxpayer References (UTR) over the phone.

• Taxpayers can find their UTR in the HMRC app, in their personal tax account and on previous tax returns and other documents from HMRC.
• If a taxpayer cannot find their UTR online or on any documents, HMRC will send it to them by post after they have successfully answered a series of security questions. 
• If agents cannot find a particular UTR online or on any documents, they will send a letter directly to the agent’s client. This can take up to two weeks to arrive.

Simple Assessment

From June 2025, HMRC will begin issuing Simple Assessment letters for tax owed for 2024-25.

• Simple Assessment letters are sent to taxpayers who are not in Self Assessment and for those who either do not have a PAYE tax code or where HMRC cannot deduct the tax due automatically through that process.
• Taxpayers who owe tax from Bank and Building Society interest may receive two Simple Assessment letters in the same tax year, depending on when information is provided to HMRC.
  • When this occurs, taxpayers should be aware that any amount due for the second assessment will be independent from the first.
• If a taxpayer receives a Simple Assessment, but they have already registered for Self Assessment or filed their tax return for the year to which this assessment relates, they or their agent can call HMRC on 0300 200 3300 to have their Simple Assessment withdrawn. 

See Simple Assessment

Closure of the HMRC online community forums

HMRC have decided to close both the agent and customer online forums with effect from 30 June‌‌‌ 2025. 

• The forums will stop accepting new queries from early June 2025.
• HMRC highlight their other digital support channels, including Webchat, X (formerly Twitter), Agent Talking Points webinars, tax agents’ handbook, service dashboard, and Agent Updates. 

See HMRC to close agent and customer online forums

Loan relationship unallowable purpose rule: updated guidance

• Following recent Court of Appeal decisions in BlackRock, Kwik-Fit, and JTI Acquisitions, considering the application of the unallowable purpose rule, HMRC has published updated guidance on the rule in the Corporate Finance Manual at CFM38100.

 See Loan relationships: Start here

New interactive compliance check guidance tool now live

HMRC’s new interactive compliance check guidance tool is intended to help businesses and individuals understand HMRC compliance checks.

• The interactive compliance check guidance tool brings together existing compliance guidance and videos in one place to help taxpayers understand:
  • HMRC compliance checks.
  • Why HMRC has requested specific information or documents.
  • How to request extra support due to health or personal circumstances.
  • How to appoint someone to act on your behalf.
  • What to do if you disagree with a decision made by HMRC.
  • How to pay a tax assessment or penalty.

Mandating the reporting of Benefits In Kind (BIKs) and expenses through payroll software

On 28 April 2025, the Government announced that the mandatory reporting and paying of Income Tax and Class 1A National Insurance Contributions (NICs) on BIKs in real time via payroll software will be introduced from 6 April 2027 instead of 6 April 2026. 

• HMRC has published a technical note mandating the reporting of benefits in kind and expenses, which provides more operational information on how businesses can adapt to these changes in time for April 2027.
• If you wish to voluntarily payroll BIKs in 2026-27, you must register for voluntary payrolling by April 2026. You can only start to payroll benefits and expenses from the beginning of the new tax year.
• Not all BIKs can be reported through the current voluntary payrolling system for the 2026-27 tax year.
  • Interest-free and low-interest (beneficial) loans and employment-related living accommodation will still need to be reported on a P11D for Income Tax.

See Mandatory payrolling of benefits from 2027: Briefing

Use of VAT grouping within the care industry

Revenue and Customs Brief 2 (2025) has recently been issued. This was followed by Spotlight 70. 

• These explain that a VAT grouping structure used by some state-regulated care providers to recover VAT on costs that relate to supplies of welfare services (that would otherwise be exempt from VAT) is considered by HMRC a form of tax avoidance. 
• The Brief and Spotlight explain the action HMRC is taking, and what users of the arrangements should do in light of the publications. 

See Revenue and Customs Brief 2 (2025): Use of VAT grouping within the care industry and Spotlight 70: VAT grouping structure arrangements used by care providers

Spotlight 68: Using prepaid debit cards for profit extraction to reduce profits and disguise income

Spotlight 68 provides information on a tax avoidance scheme being marketed to companies that aims to reduce Corporation Tax and VAT liabilities whilst also claiming to provide non-taxable income for directors, their associates or both.

See Spotlight 68: Prepaid cards used for profit extraction

Making Tax Digital for Income Tax (MTD for IT) events

HMRC is hosting a series of MTD for IT events at HMRC offices across the UK this year.

• Agents and software developers are welcome to attend one of these sessions to help prepare for when MTD for IT becomes a legal requirement in April 2026.
• Registration is now open for the following events, which will each take place from 11 a.m. to 3 p.m.:
  • Tuesday 3 June 2025: Liverpool.
  • Thursday 3 July 2025: Nottingham.
  • Wednesday 6 August 2025: Manchester.
  • Tuesday 9 September 2025: Bristol.
  • Monday 13 October 2025: Birmingham.
• Spaces are limited. If you are interested in attending, please email This email address is being protected from spambots. You need JavaScript enabled to view it. with which event location you would like to attend. 

See Making Tax Digital

Statutory Neonatal Care Leave and Pay

On 6 April 2025, a new statutory entitlement to Neonatal Care Leave and Pay was introduced.

• This provides employed parents whose babies are admitted to neonatal care with a day-one employment right to take up to 12 weeks off work, depending on the length of time their baby is in neonatal care.
• Eligible parents are also entitled to up to 12 weeks of statutory pay.
• The legislation may be found here: The Neonatal Care Leave and Miscellaneous Amendments Regulations 2025 and The Statutory Neonatal Care Pay (General) Regulations 2025.
• More information can be found at: Statutory Neonatal Care Pay and Leave and Employees' guidance.

Cybercrime and the use of legitimate software

• As a tax agent, you are an attractive target for criminals.
• Access to sensitive financial information for your clients and your business makes you a prime candidate for cyberattacks.
• 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).

The threat of legitimate software

• Criminals often trick tax agents into downloading legitimate commercial software that gives them remote access to their devices.
• This can be done using phishing emails with links or attachments, sometimes disguised as a bill, certificate or another form of document. 
• It may not be obvious that this software is being downloaded, and once misused, it can provide criminals with the ability to control your device without your knowledge. 

Tips for staying safe

• Avoid following links or downloading attachments in suspicious or unexpected emails and messages.
• Be cautious of fake HMRC letters containing disguised links. You can check if a letter from HMRC is genuine or a scam using HMRC's list of recent letters to help you decide.
• Be vigilant for multi-factor authentication that you did not set up or authorise.
• Regularly monitor your accounts for any suspicious activity and filings you do not recognise.
• Regularly update your operating system and all software to protect against known vulnerabilities.
• Check your system for software that you have not installed or use and remove it if found.
• Use strong, unique passwords.

If you believe your agent account has been compromised: 

• Change your password immediately and report it to HMRC by contacting the Online Services Helpdesk on 0300 200 3600. 

If HMRC believe your agent account has been compromised:

• HMRC may immediately suspend your 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 will not be able to log in or reset your password. If you have not received a letter with the next steps to take, then you can call HMRC's Online Services Helpdesk on 0300 200 3600. 
• The helpdesk 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. 

PAYE auto-coding

After ceasing self-employment, a taxpayer may still have PAYE expenses deducted from their tax code if those expenses are still due.

• Ceasing Self Assessment does not remove expenses already included in a taxpayer's PAYE code.
• Taxpayers will need to check their current tax code and notify HMRC if those expenses are no longer due.
• If a taxpayer or agent has updated HMRC in the current tax year to advise a change to a tax code, the expenses on the latest return submitted will not alter that code.
• If a taxpayer believes that their tax code is incorrect, they should follow the guidance in Tax codes — How to update your tax code.

See How to check your PAYE Code

Technical consultation on draft secondary legislation for Restitution Interest

HMRC have published a technical consultation in respect of draft secondary legislation for Part 8C of the Corporation Tax Act 2010, which concerns restitution interest.

• The existing rules in Part 8C of the Corporation Tax Act 2010 are intended to address the potential for awards by the High Court of restitution interest made on a compound basis concerning claims made under a mistake of law. It withholds and subsequently charges Corporation Tax at a rate of 45% on payments of restitution interest. 
• The draft regulations:
  • Will put beyond doubt that Part 8C does not apply to claimants who are entitled to awards of simple interest at a rate which is equivalent to or lower than a statutory rate of interest available under the Taxes Acts.
  • Will introduce a two-year time limit for making an assessment, which commences from the end of the accounting period in which the claim for restitution is finally determined, if the normal time limits for the making of an assessment have expired before that time.
• The consultation runs until 30 May 2025.
• Copies of the draft regulations and accompanying tax information and impact note are available to read at Corporation Tax: changes to restitution interest rules.

Carbon Border Adjustment Mechanism (CBAM): policy update and consultation

UK importers and international partners are invited to give feedback by 11:59 p.m. on 3 July 2025 on the Government’s draft primary legislation for the CBAM, which was published on 24 April 2025 for technical consultation.

• CBAM comes into effect on 1 January 2027 and will impact importers of goods from the aluminium, cement, fertilisers, hydrogen, iron and steel sectors and downstream producers that use these goods in their supply chains.

The end of the Alcohol Duty Stamps Scheme

The Alcohol Duty Stamps Scheme closed on 1 May 2025. 

• Products previously within the scheme, typically higher strength spirits, no longer require a UK Duty Paid stamp.
• Producers and importers should now stop stamping retail containers with the duty stamp design. They should update their bottle label designs for new stock. Existing stamped stock will remain legal for sale and supply, while legacy stamped stock is used up.

Self Assessment early filing and top tips

HMRC are encouraging taxpayers to file tax returns early and have published 'top tips' for Self Assessment (SA).

Registering and reactivating SA

• It takes longer to process tax returns from taxpayers who have not registered for SA prior to submitting their return, or who did not reactivate their SA account.
• People who are new to SA must register with HMRC so they can be set up on the system and receive a notice to file.
• If your client has previously been in SA and did not file a tax return last year, make sure their account is reactivated before submitting their tax return.
  • Returning SA taxpayers do not need to register as new, as they already have a Unique Taxpayer Reference (UTR).
• The quickest and easiest way to register and reactivate SA accounts is online. Taxpayers can do this in their online account.
  • If agents need to do this for them, go online to find out how to register your client or reactivate a Self Assessment account using one of the following forms: CWF1 for self-employed clients or SA1 for clients who are not self-employed.

Use the Income Record Viewer to see your client’s:

• PAYE information for the current year and the four previous tax years.
• Employment records, including time in employment and PAYE reference.
• Latest tax code for the current tax year, including all allowances and deductions.
• State and private pension information.

To help speed up repayment requests, you should:

• Register or reactivate your client’s account for SA and wait until they receive their notice to file before submitting their tax return.
• Check the client’s details are correct and up to date, this includes their bank sort code, account number, UTR, National Insurance number, name and address.
• Leave 14 days after making a payment before you request a repayment.
• Make sure repayment requests for clients who were previously bankrupt are submitted using their post-bankruptcy UTR.
• Notify HMRC of the capacitor if the client died before submitting their tax return and before requesting a repayment.
• Encourage clients to receive their repayment electronically.

Tax returns that include the Marriage Allowance must be submitted in the correct sequence to avoid delays:

• The person transferring the allowance (transferor) should submit their tax return first if the person receiving the allowance (recipient) is also in SA.
• The recipient should leave 72 hours after the transferor has submitted their tax return before submitting theirs.

Stopping Self Assessment

• If your client no longer needs to file a tax return, you or they should contact HMRC as soon as possible. 

Submitting a tax return as an amendment

• It is good practice to submit your client’s tax return as an original, not as an amendment, to avoid delays.
• HMRC receive a high number of tax returns submitted as an amendment using third-party software, however, HMRC have not received the original tax return.
• This results in delays because such tax returns cannot be processed automatically. To make sure that tax returns are processed quickly, submit the original tax return as normal and not as an amendment.

Repayments through PAYE

• Check with your client if they received a repayment through PAYE and that it is included in their tax return before you submit a repayment claim through SA.
• If a repayment has already been made through PAYE, HMRC will have to check the position manually to ensure that your client is not repaid more than they are due. This will delay your client’s claim.

Contacting HMRC

• When contacting the Agent Dedicated Line, HMRC will deal with a maximum of 5 taxpayers per call. To maximise HNRC's service, they suggest you contact HMRC with multiple clients rather than individually.

Updating your clients’ details

• Delays often occur because client details such as name and address are not correct. Use HMRC's online services to amend your client details or ask them to update them in their HMRC online account.

See Self Assessment Return 2024/25: What's new?

External link

Agent Update 131: May 2025