Employer Bulletin: October 2025

HMRC have published their Employer Bulletin for October 2025. We have summarised the key content for you, which links to our detailed guidance on the topics covered.

employer bulletin

Making your PAYE Settlement Agreement payment

A PAYE Settlement Agreement (PSA) allows you to make one annual payment to cover all the tax and National Insurance Contributions (NICs) due on small or irregular taxable expenses or benefits for your employees. 

If you have a PSA for 2024-25, any tax and NICs must clear into HMRC's account by 22 October 2025 if paying electronically (19 October if not).

  • If your payment is received late, you may have to pay interest and a late payment penalty. 
  • To pay, you will need to use the PSA reference number, for example, XA123456789012, from the payslip HMRC sent to you.
  • If you do not have a payslip, you must use the reference number quoted in the covering letter when your PSA was first formalised (SAFE reference). 
    • You can also get your SAFE reference by phoning the Employers Helpline on 0300 200 3200.
  • Do not use your submission reference or PAYE Accounts Office reference to make your PSA payment. 
  • You do not need to wait until HMRC has processed your PSA calculation to make a payment. 

See PAYE Settlement Agreements

New Advisory Electric Rate for fully electric company cars

Advisory Fuel Rates (AFR) are designed to simplify administration for employers and company car drivers.

  • Updated quarterly, these rates help employers to reimburse employees for fuel costs incurred during business travel in company cars.
  • Employees may also use these rates to repay their employer for the cost of any private fuel usage. 
  • AFR guidance now includes a new Advisory Electric Rate (AER) for fully electric company cars charged at public charging points. 
  • If the cost per mile of a public charger exceeds the AER, employers or employees may use a higher rate, provided they can show the cost per mile was higher. 
  • For journeys where a company car is charged at both public and residential locations, you may apportion the mileage to reflect the proportion of charging at each location. 
  • Any apportionment should be carried out on a fair and reasonable basis. 

See Advisory fuel rates (company car drivers)

More time for many parents to register for Tax-Free Childcare

If you have new starters or employees returning from parental leave who wish to register for Tax-Free Childcare, they now have more time to apply. 

  • New changes introduced on 15 September 2025 mean those starting a new job or returning to work following maternity, paternity, shared parental or adoption leave can benefit from weeks of extra eligibility and align with the Free Childcare for Working Parents scheme. 
  • Previously, parents needed to wait until 31 days before they started work, but now there are longer applicable periods, providing more flexible support to parents.

Those returning to work:

  • Between 1 October 2025 to 31 January 2026 can apply from 1 September 2025 to 31 December 2025.
  • Between 1 February 2026 to 30 April 2026 can apply from 1 January 2026 to 31 March 2026.
  • Between 1 May 2026 to 30 September 2026 can apply from 1 April 2026 to 31 August 2026.

See Childcare: Free and Tax-Free Childcare

It is not too late for parents of teens to go online to extend their Child Benefit claim

If Child Benefit has stopped for your employees, it is not too late for parents to go online or on the HMRC app to extend their claim and confirm if their teens are staying in full-time education or training. 

  • If you have employees with children aged between 16 and 19 years old, they can still claim up to £1,354 a year in Child Benefit if eligible.
  • You can help your employees get the payments they are entitled to by reminding them to extend their Child Benefit claim online or on the HMRC app.
  • Once their details have been updated, any payments due will be backdated.

The letter they will have received contains a QR code which takes them straight to the digital service within the Child Benefit when your child turns 16 guidance. 

  • In the guidance, they can also check eligibility, or they can search 'extend Child Benefit' and sign into their online account. 

If your employees or their partners have opted out of receiving Child Benefit payments because of their income, they still need to extend their claim. 

  • Parents who have an individual adjusted net income of £60,000 or more are liable for the High-Income Child Benefit Charge (HICBC).
  • You should encourage your employees to use the online Child Benefit tax calculator to get an estimate of how much benefit they will receive and what the charge may be. 
  • It may now be worthwhile for them to opt back into payments or make a claim if they have not done so before. 

A reminder to employers about National Insurance calculation methods for directors

You should check the NICs due at the end of the tax year using the annual earnings period method to identify any shortfalls. 

  • This includes directors whose NICs you have calculated using the alternative method throughout the tax year.

Although this applies to all tax years, there are particular concerns where there are changes to the NICs rates, for example, 2022-23.

  • You should review your submissions for the 2022-23 tax year and onwards to make sure that no further NICs are due. 
  • If you identify any underpayments, HMRC recommend that you self-correct through PAYE where possible. 
  • If you are unable to self-correct, HMRC encourages you to Make a voluntary disclosure. In all cases, quote reference 'DNIC2025'. 

See Salary 2025/26 (interaction with NICs) and National Insurance: Rates

When NICs should be paid on earnings for internationally or globally mobile employees

HMRC has updated its guidance to help employers determine when NICs are due on earnings paid to internationally mobile employees.

  • Employees are internationally mobile if they:
    • Live in the UK but work overseas.
    • Come from overseas for periods of work in the UK.
    • Are UK or overseas residents who move in and out of the UK to work.
    • May work in several countries and have an employer based overseas. 

While earnings are generally paid at the time the work is carried out, employees may receive later payments, such as bonuses, after they are earned. 

  • The updated guidance confirms that if the employee was liable for NICs at the time the work was carried out, they will continue to be liable for NICs in respect of those earnings, even if they are paid later when the employee has gone abroad. 

See Globally mobile employees: National Insurance

How to correct NICs on earnings for internationally or globally mobile employees

Employers may find that they have either overpaid or underpaid NICs. Agents should advise their clients to use the following process where this is the case:

  • Employers should make corrections through Real-Time Information (RTI) going back six years.
  • Relevant evidence should be held to support any amendment, including:
    • A record of the employees and their National Insurance numbers.
    • Total amount and description of relevant earnings and amount of NICs already paid.
    • When the relevant earnings were paid and the period over which they were earned. 
    • Amount of employee and employer Class 1 NICs now considered to be correct. 
    • Amount of NICs now due to be paid or refunded.
    • An explanation of what caused NICs to be over- or underpaid. 

HMRC provides Guidance on how to correct the payroll through Full Payment Submission (FPS) and how to make a refund claim when employers have overpaid NICs and are unable to amend their RTI returns.

  • Where a refund claim is being made, the employer will need to do the following, in addition to providing the above evidence:
    • Use the reference 'NICs refund for Internationally Mobile Employees'.
    • Provide the reason as to why they cannot make the amendment through RTI.

Further information on How to make a voluntary disclosure to HMRC is available.

  • Employers should use the reference 'NICs Disclosure for Internationally Mobile Employees' in their disclosure letter.

Large businesses with an HMRC Customer Compliance Manager (CCM) should notify them of any RTI corrections before making any refund claims.

  • Voluntary disclosures being made by large business customers should be sent to HMRC in line with the existing process.

Where employees believe they are due a refund, they must contact their employer first. 

  • Any overpaid NICs by the employee should be repaid to the employee by the employer.
  • If the employer has not submitted an RTI amendment or applied for a refund, their employees will need to provide the following information to HMRC:
    • National Insurance number.
    • Description of relevant earnings.
    • When the relevant earnings were paid and the period over which they were earned.
    • Reference that this is an internationally mobile employee case where NICs were overpaid. 
    • Class 1 NICs are being reclaimed.
    • The reason their employer is not applying for the refund on their behalf. 

Electronic payment deadline falls on a weekend

In November 2025, the electronic payment deadline falls on Saturday, 22 November.

  • To make sure your payment reaches HMRC on time, you must have funds cleared into HMRC's account by 21 November 2025, unless you can arrange a Faster Payment. 
  • It is your responsibility to ensure your payments are made on time. If your payment is late, you may be Charged a penalty. 

See PAYE: Paying HMRC

Guidance for employers on RTI reporting obligations for payments made early at Christmas

Some employers need to pay their employees earlier than usual in December. This is to remind you of the permanent easement on reporting RTI that applies during this time.

  • If you do pay early over the Christmas period, you must report your normal or contractual payment date on your FPS.
  • For example, if you pay on 19 December, but your normal payment date is 31 December, report the payment date as 31 December. 
  • In this example, the FPS would need to be sent on or before 31 December.
  • Doing this will help to protect your employees' eligibility for income-based benefits, as an early payment could affect current and future entitlements. 

New student loan plan type: Plan 5

HMRC is giving employers advance notice that the Department for Education (DfE) has introduced a new student loan Plan type 5. 

  • Repayments are due to begin from 6 April 2026.
  • Key details include that:
    • Plan 5 will be operated and collected in the same way as the current plan types 1, 2 and 4.
    • The earliest repayments for PAYE will start is 6 April 2026. 
    • The annual repayment threshold will be £25,000.
    • Repayments will be made at 9% on earnings over the £25,000 threshold.
    • Employers will start to receive student loan start notices from March 2026 for Plan 5 borrowers due to go into repayment from April 2026.
    • Plan 5 is for those who applied to Student Finance England and started courses from August 2023 onwards.
  • Software developers are working on payroll updates due to be in place by 6 April 2026. 
  • Guidance and forms will be updated by 6 April 2026.
  • Employers are reminded that they can:
    • Only deduct one plan type at a time, Plan 1, Plan 2, Plan 4 or, from April 2026, Plan 5.
    • Deduct the postgraduate loan at the same time as one of the student loan plan types above. 

See Student Loans

Automatic enrolment duties: employing staff for the first time

The Pensions Regulator has refreshed its tailored employer duties timeline. This will help you understand your automatic enrolment duties, what you need to do and when.

  • Employers' legal duties begin on the day your first member of staff starts work.
    • This is known as your duties start date.
  • Even if you think you will not need to put staff into a workplace pension scheme, you will still have duties.
  • Automatic enrolment is an employer's legal duty and if you do not act in time, you could be fined. 
  • To work out your automatic enrolment legal duties as a new employer, begin by answering a couple of questions on The Pensions Regulator website.

See Auto-enrolment: Workplace pensions

Help your employees prepare for retirement and plan for the future

You can use HMRC's app to:

  • Access your employees' State Pension forecast.
  • View your employees' projected pension age.
  • Make voluntary National Insurance payments if it will increase your employees' State Pension. 

The app is free to download and provides your employees with 24/7 access to their pension information.

HMRC has also launched guidance to help Check if you have to pay tax on your pension.

  • Consider recommending the HMRC app and checker tool to put pension planning power in your employees' hands.

Guidance for labour supply chains featuring umbrella companies: PAYE responsibilities

HMRC has published guidance on PAYE rules for labour supply chains that include umbrella companies in response to stakeholder requests to provide early information on how the rules will work.

  • From April 2026, recruitment agencies, or in their absence, end clients, will be accountable for PAYE on payments to workers supplied through umbrella companies.
  • The guidance provides detailed information on the changes which have been designed to tackle non-compliance in the umbrella company market.

Agencies and other parties in labour supply chains can also Register for one of HMRC's in-depth webinars on 21 October 2025 or 17 November 2025. 

See Agency workers: Umbrellas & anti-avoidance PAYE rules

Spotlight 71: warning for agency workers and contractors who are moved between umbrella companies

Some umbrella companies encourage agency workers and contractors to use tax avoidance schemes.

  • These schemes do not follow UK tax rules.
  • They often move workers between different umbrella companies to hide the tax avoidance from HMRC.

HMRC has issued Spotlight 71 to help those working through umbrella companies to spot the signs of tax avoidance, particularly those who are unknowingly moved between umbrella companies. 

  • This provides information on what some of the signs of tax avoidance are and how you might identify them.
  • It also provides examples of what you might be told by those operating tax avoidance schemes when contacting them about potential avoidance.

If you think you or your workers may already be involved in this type of arrangement, HMRC can help you get out.

  • HMRC offers a range of support to help people get back on track or avoid being caught out in the first place. 
  • You can also report tax fraud and tax avoidance arrangements, schemes, and the person operating them to HMRC.

See Spotlight 71 warns agency workers about umbrella companies

'Tax help for hustles' campaign: new resources for employees

HMRC's 'Tax help for hustles' campaign helps those with side hustles get their tax right.

  • The campaign supports those who earn additional income, outside of their day job, to get their tax right.
  • Whether it is digital content creation, selling clothes online, or tutoring, side hustles are becoming an increasingly important part of Britain's economy, contributing to job creation and economic growth. 

The 'help for hustle' campaign explains the steps side hustlers need to take to meet their tax obligations when earning additional income, helping them to avoid any tax surprises. 

  • HMRC are asking employers to use HMRC's campaign resources in internal messaging to provide information that employees may find useful, especially if they have side hustles.

Update on Winter Fuel Payment recovery through the tax system

From Winter 2025, the eligibility criteria for Winter Fuel Payments in England, Wales and Northern Ireland, and the Pension Age Winter Heating Payment in Scotland, will be expanded so that more pensioners are eligible.

  • If an individual has a total income of over £35,000, HMRC will recover winter payments through the tax system.
  • A charge to Income Tax will apply that is equal to the full value of the payment received. 
  • For taxpayers under PAYE, HMRC will automatically collect the payment through a change to the taxpayer's tax code, unless they already file a Self Assessment tax return. 
    • This means their Winter Fuel Payment will be deducted from their income and paid to HMRC in monthly instalments across the 2026-27 tax year, starting from April 2026.
  • For taxpayers under Self Assessment, the payment does not need to be included in this year's tax return. 
    • HMRC will automatically include the payment on their 2025-26 tax return, unless they file a paper tax return. 

New Cryptoasset Reporting Framework: what employers need to know

From 1 January 2026, the UK will introduce the Cryptoasset Reporting Framework (CARF).

  • If your business is to exchange cryptoassets on behalf of taxpayers or provide a means for taxpayers to exchange cryptoassets, you will be classified as a Reporting Cryptoasset Service Provider and may need to check if you will need to report cryptoasset data to HMRC.
  • From January 2026, you will need to collect detailed taxpayer and tax-relevant data, including:
    • Names.
    • Addresses. 
    • Tax identification numbers for all users. 
    • Crypto transaction data. 
  • You must register with HMRC's online service by 31 January 2027 and submit your first report by 31 May 2027. 
  • Penalties of up to £300 per user apply for non-compliance, late reporting, or inaccurate data.

HMRC have also published Guidance on information you will need to give to UK cryptoasset service providers if you are a user of a UK cryptoasset service.

  • The information you give means HMRC will be able to link your cryptoasset activity to your tax record. 
  • This will make it easier for HMRC to find out what tax you need to pay.

Further guidance on Reporting to HMRC if you provide cryptoasset services in the UK is available, including information on data collection requirements, reporting procedures, and user obligations.

See Cryptoasset Reporting Framework (CARF)

Guidelines for Compliance: Help with Freeports

HMRC has recently published new Guidelines for Compliance (GfC): Help with Freeports - GfC14.

Freeports are special areas within the UK's borders where different economic regulations apply.

  • They offer businesses a range of tax reliefs, including savings on NICs, Stamp Duty Land Tax, and Capital Allowances for qualifying investments.
  • They also provide access to simplified and beneficial customs procedures, such as duty deferral and streamlined import and export processes. 

These guidelines are primarily for taxpayers who have business premises in a Freeport or are considering doing business within a Freeport.

  • They will also be useful to Freeport governing bodies, customs site operators and professional bodies that advise clients on Freeports.

They provide practical support by:

  • Explaining the reliefs and benefits available within Freeports.
  • Highlighting areas where HMRC is identifying errors. 
  • Encouraging compliance by clarifying areas of uncertainty.
  • Helping taxpayers reduce the risk of incorrectly claiming reliefs or benefits.
  • Advising on what records and evidence should be retained. 
  • Explaining what to do if a mistake is made.

See Freeports

No need to phone: online methods of contacting HMRC

PAYE online:

  • After you have Registered as an employer, HMRC will automatically send you a letter with an activation code, which enables you to enrol for PAYE online. 
    • You need to use the code to activate your account within 28 days of the date on the letter you receive from HMRC.
    • Alternatively, if you did not activate your online account in time or you registered by phone or post, you can enrol for PAYE online. 
  • Your contact details can also be updated through PAYE online.
  • Using your PAYE online account, you can:
    • Check your balance and find out what you owe.
    • Receive important notices for late reporting or payments. 
    • Access tax codes for your employees. 
    • Appeal penalties.
    • Check your payment history. 

Online methods to claim repayments, reallocations, and help to correct errors in your PAYE bill:

Timeliness for replies from HMRC:

  • You can Check when you can expect a reply from HMRC, without needing to call.
  • This provides the expected response timeline to:
    • Register as a CIS subcontractor.
    • Claim a CIS refund.
    • Register for PAYE.
    • Request employer's PAYE refund.
    • Request your PAYE reference number, includes not received or lost reference numbers.

Understanding intermediary services in tax administration: new information for taxpayers

HMRC has published new information for taxpayers about intermediaries in the tax system, acknowledging the vital role employers and other intermediaries play while addressing potentially harmful practices by a minority.

  • Understanding tax advisers and recognising potentially harmful practices provides resources on:
    • Choosing representation.
    • Understanding taxpayer responsibilities.
    • Reporting exploitative behaviour. 
  • It also includes information relevant to employers who manage PAYE on behalf of employees, as well as resources for employees who may use umbrella companies through employment agencies. 

External link

Employer Bulletin: October 2025