HMRC have published their Agent Update for October 2025. We have summarised the key content with links to our detailed guidance on the topics covered, including the introduction of a new student loan plan type, adjustments for calculating Capital Gains Tax (CGT) for the 2024-25 tax year, and updates to various areas of HMRC guidance.
Getting your clients ready for Making Tax Digital (MTD) for Income Tax
From November 2025, taxpayers who have submitted their 2024-25 tax return will start receiving letters from HMRC making them aware of MTD for Income Tax.
- As a result, you may receive increased contact from your clients about this.
These awareness letters will:
- Inform taxpayers that, based on the information they have submitted, they will need to use MTD for Income Tax from April 2026.
- Inform taxpayers of what they need to do to get ready.
- Include a QR code linking them to GOV.UK guidance.
The letters will also advise taxpayers to contact their tax agent to discuss what they need to do.
- To help you prepare, you should start reviewing your current clients' tax affairs and sign up those who will need to use MTD for Income Tax from April 2026.
See MTD: Toolkit for accountants
Agent support for MTD for Income Tax
Agents now have access to tailored support to help them and their clients prepare for MTD for Income Tax.
- HMRC's MTD agent engagement team is running interactive group sessions on Microsoft Teams to provide guidance and support.
- These sessions will give you direct access to HMRC specialists in an interactive environment where you can discuss what is changing and get your questions answered in real time.
- You can Register your interest through an online form using your agent services account.
- You will need to sign in with your Government Gateway user ID and password linked to your agent services account to access the form.
- If you do not have an agent services account, you can access the form by signing in with your online services for agents account. In this case, you will need to enter your contact details manually.
- When completing the form, you will be asked to:
- Give permission to be contacted by HMRC by email.
- Indicate how many clients you expect to sign up for MTD for Income Tax, including those for testing.
- Express an interest in the type of support you need.
- Once you have completed the form, the MTD agent engagement team will be in touch with relevant support options, including instructions for joining an interactive session.
MTD exemption for digitally excluded taxpayers
As an agent, some of your clients may qualify for an exemption from MTD for Income Tax because they are digitally excluded.
- Your client may be digitally excluded if it is not reasonable for them to use MTD for Income Tax compatible software to keep digital records or submit them to HMRC.
There are different reasons why this may apply to your clients, and HMRC will consider all applications on a case-by-case basis, such as:
- Their age, health condition or disability stops them from using a computer, tablet or smartphone to keep digital records or submit them to HMRC.
- They are a practising member of a religious society or order whose beliefs are incompatible with using digital communications or keeping digital records, and they do not use a computer, tablet or smartphone for business and personal use.
- They cannot get internet access at their home or business because of their location, and cannot get access at a suitable alternative location.
If you think your client is digitally excluded (and you will not meet the requirements on their behalf), you can apply for an exemption from MTD for Income Tax for them.
- HMRC will aim to process your application within 28 days of receiving it.
- It may take longer if you do not give HMRC all the information they need when you apply.
- You should still prepare your clients to use MTD for Income Tax while you are waiting for HMRC to respond, in case their application is not accepted.
If you have previously signed up your clients for MTD for Income Tax and think they should have been considered digitally excluded because their circumstances have changed, you should apply for an exemption now.
- If your client was previously confirmed as exempt from sending VAT returns using MTD compatible software because they are digitally excluded, you should contact HMRC to confirm their status for MTD for Income Tax.
See New MTD guidance for the digitally excluded
Limited authorisation
HMRC no longer accept the '64-8 Authorising your agent' form to request that an agent be given limited authorisation to act on behalf of an individual or business.
- If a taxpayer wants to authorise an agent to deal with a specific area of their tax but not act as a full tax agent on HMRC's records, this is called limited authorisation.
- An agent with limited authorisation can:
- Talk to HMRC and answer questions on a taxpayer's behalf.
- Help a taxpayer to fill in forms.
- The agent will not have access to the taxpayer's tax affairs online.
To give an agent limited authorisation to help deal with their tax, taxpayers must write to HMRC at:
National Insurance contributions and Employers' Office
HM Revenue and Customs
BX9 1AN
The letter of authority must include:
- Taxpayer name and address.
- Taxpayer tax reference number, for example, their Unique Taxpayer Reference (UTR).
- The name and address of the agent they want to authorise.
- The taxpayer's signature.
Address rejections
Agents are reminded of HMRC's hints and tips article in Issue 128 of Agent Update.
- It details some of the ways in which agents can help reduce the number of rejections, particularly in ensuring that the address from the Royal Mail postcode finder is used in the client's personal tax account, and that this matches any subsequent Self Assessment repayment claims.
Get ahead with Self Assessment: go digital and file early
The 2024-25 Self Assessment tax season is well underway. Now is the perfect time to help your clients and your practice stay ahead.
- Filing early and using HMRC's digital services can make the process smoother, reduce stress, and give everyone more time to plan.
- It also helps avoid last-minute errors.
These HMRC online services save time:
- Self Assessment for agents: submit tax returns, view tax liabilities and payments, download your client list.
- Income Record Viewer: access PAYE information for the current and previous four tax years, taxable benefits and details of underpaid tax.
- Agent Services Account: manage authorisations and access services, including MTD for Income Tax
Encourage your clients to provide the information you need to file their tax return now and join the thousands of agents who have got ahead of the deadline.
Self Assessment reactivation using option two of the agent-dedicated line
HMRC are introducing a new option exclusively for agents to help with the process of reactivating clients' Self Assessment accounts.
From 1 October 2025, agents needing to re-activate a client's Self Assessment account will be able to do so by calling the agent-dedicated line.
- The service will be available by selecting option two, Self Assessment or PAYE for individuals' enquiries, from the agent dedicated line menu.
- Callers will then be given an option to be routed to a team of dedicated advisers who, in line with existing procedures, will be able to discuss a maximum of five client accounts per call.
- This option is available for reactivations only; any first-time client registrations will be required to follow the existing process.
- Reactivations cannot be requested using web chat.
- Advisers will not be able to transfer taxpayers to this service from other helplines.
- Agents will also still be able to reactivate a Self Assessment account for a client by completing an online SA1 of CWF1 form.
New student loan plan type: Plan 5
HMRC is giving agents 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 of Plan 5 are:
- 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 on 6 April 2026.
- The earliest repayments for Self Assessment will start on 6 April 2027.
- The annual repayment threshold will be £25,000. Repayments will be made at 9% on earnings over the £25,000 threshold.
- Employers will begin 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 that are due to be in place by 6 April 2026.
- Guidance and forms on GOV.UK will be updated by 6 April 2026.
- Agents 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 student loan plan type above.
See Student Loans
Self Assessment student loan repayments and payrolled benefits in kind
As previously highlighted in Agent Update Issue 129, a new box has been added to the 2024-25 Self Assessment tax return for student and postgraduate loan purposes.
- This box is specifically for reporting payrolled Benefits In Kind that are subject to Class 1A National Insurance Contributions (NICs) only.
- This update affects clients who are:
- Within Self Assessment.
- Repaying a student loan, a postgraduate loan, or both.
- Receiving payrolled benefits in kind that are subject to Class 1A NICs through their employer.
- It is important to note that student and postgraduate loan repayments are not due on payrolled Benefits In Kind that are taxed through payroll and are subject to Class 1A NICs only.
- The new box allows these payrolled Benefits In Kind to be reported separately from total PAYE income on the Self Assessment tax return, helping ensure the correct loan repayment amount is calculated.
As a reminder, to ensure your client pays the correct amount of student or postgraduate loan repayment, you should report the payrolled Benefits In Kind subject to Class 1A NICs amount in the correct boxes on the Self Assessment tax return.
- Depending on the return completed, use these boxes to report these payrolled Benefits In Kind:
- Online tax return: box titled 'Payrolled benefits included in pay from employer which affect your student loan repayments'.
- SA102 paper tax return: box titled 'Payrolled benefits included in box 1 which affect your student loan repayments'.
See Self Assessment Return 2024/25: What's new?
New Advisory Electric Rate (AER) for fully electric company cars
Advisory Fuel Rates (AFR) are designed to simplify administration for employers and company car drivers.
- Updated quarterly, these rates assist employers in reimbursing 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 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)
Bank and building society interest
From October 2025, HMRC will start to issue Simple Assessment letters for any tax owed on bank and building society interest earned between April 2024 and April 2025.
- Some taxpayers may have already received a Simple Assessment for the 2024-25 tax year that did not include their bank or building society interest or both.
- If HMRC subsequently receives information about interest, these taxpayers may receive a second Simple Assessment for the same tax year.
- When this occurs, you should make your clients aware that the second letter will show the total tax owed for the year.
- This includes the amount from the first letter, even if it has been paid.
- To work out what they owe, your clients should deduct anything they have already paid from the amount in the second letter.
How to pay:
- If your client needs to pay tax on savings interest, their Simple Assessment letter will explain how much they owe and why.
- Guidance is available on How to pay their tax bill.
Tax codes and bank statements may show different interest amounts because:
- Some interest may be tax-free under the Personal Savings Allowance.
- Only taxable interest shows in tax codes.
- HMRC may use estimates based on recent data.
Be aware that:
- Banks and building societies tell HMRC about interest paid to taxpayers each year.
- Most people can earn some interest before paying tax.
- Taxpayers can use HMRC's online calculator to check how much tax they might pay on interest from savings.
- Your clients can use their Personal Allowance for tax-free interest if they have not used it on wages, pension or other income.
- They may also get a Personal Savings Allowance, which is up to £1,000 a year in interest without paying tax, depending on their tax band.
See Savings income: How interest is taxed
Capital Gains Tax (CGT): work out your adjustment for the 2024-25 tax year
At the Autumn Budget 2024, the government announced changes to the main rates of CGT.
- If there was a disposal of assets from 30 October 2024, the Self Assessment tax return will not automatically calculate the tax due at the new main rates for the 2024-25 tax year.
- This means you need to take additional steps for individuals, trustees and personal representatives to ensure the correct CGT is calculated and paid.
- To do this, use the Online calculator to work out the adjustment for your client's tax return for disposals of assets from 30 October 2024, when the rates changed.
- You will then need to record the adjustments in the adjustment boxes:
- SA108: Individual's capital gains summary page.
- SA905: Trust and Estates capital gains.
- SA970: Tax return for trustees of registered pension schemes.
- If you use commercial software to submit your client's tax return, you need to check that the correct rates are used.
- Changes to the rates of CGT for 2024-25 exclude:
- Residential property.
- Business Asset Disposal Relief (BADR).
- Investors Relief.
- Carried interest.
See CGT: How to calculate a capital gain or loss
UK tax residence: all guidance in one place
To help your clients navigate their UK tax obligations, HMRC have created a new Collection page for residence guidance to bring together existing guidance into one location.
- HMRC's guidance has not changed; they have just made it even easier for taxpayers to find the information they need by creating a new section on GOV.UK dedicated to this topic.
This page includes guidance on Changes to the non-UK domiciled individuals from 6 April 2025 for:
- Long-term UK residents, former non-domiciled individuals.
- Qualifying new UK residents.
- Employers.
If needed, your clients can use this guidance to support their Self Assessment submission for 2025-26.
- The form will be available from April 2026, with a deadline of 31 January 2027.
- For tax years 2024-25 and earlier, you can file your clients' Self Assessment tax return as an authorised agent in the normal way.
See our Overseas & Residence guides
Improvements to HMRC's online form for correcting VAT errors
HMRC have enhanced their online form for correcting VAT errors.
- Authorised agents who want to make a correction to their VAT return, an error correction notification, on behalf of their client, can now upload additional documents in a range of formats and benefit from increased space for free text, up to 2,000 characters, to support their error disclosure.
- The online form has co-existed with the print and post process (VAT652) for many years.
- Form VAT652 was withdrawn on 5 September 2025, leaving the online form as the quickest way of correcting VAT errors.
The new and improved compliance interactive guidance is now live
In April, HMRC launched their new compliance interactive guidance to help businesses and individuals understand HMRC compliance checks.
- HMRC have now launched a new and improved version featuring a variety of improvements.
- Taxpayers will enjoy a more tailored experience, so they only see guidance that is relevant to their needs and educational materials to help them take better control of their money and taxes.
- HMRC have also made improvements to make it more user-friendly.
The Compliance tool brings guidance and educational materials into a single place, making it easier to find what they need and enabling them to navigate more easily to the appropriate information, such as:
- 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.
The tool and associated material are free to use and available directly from GOV.UK and is for information purposes only.
- Users will not be registered for any taxes if they use the tool.
New GOV.UK page to help taxpayers make informed choices when seeking tax representation
HMRC have published a new page on Understanding tax advisers and recognising potentially harmful practices, which aims to help taxpayers understand the role of intermediaries in the tax system and identify potentially harmful practices.
- HMRC recognises that most intermediaries provide valuable services to taxpayers and support tax administration.
The new GOV.UK page consolidates existing resources to help taxpayers:
- Understand how to make informed choices about representation.
- Recognise signs of potential exploitation by bad actors.
- Know how to report concerns about intermediary behaviour.
HMRC acknowledges the important role professional advisers play in the tax system, while helping taxpayers identify concerning practices, such as requests to share HMRC login details, misleading claims of being "HMRC approved", or inappropriate use of HMRC branding.
Expansion of the Research and Development (R&D) professional bodies' mailbox: now open to all agents
Originally launched in May 2024, the R&D professional bodies' mailbox was created as a dedicated channel for members of professional bodies to contact HMRC to report concerns about standards in R&D claims.
- HMRC have now expanded access to this mailbox.
- All agents can now use it to report concerns about poor standards by other agents advising on R&D claims.
- This includes raising issues about other agents who may be:
- Providing misleading information to clients.
- Demonstrating poor technical knowledge.
- Engaging in potentially dishonest behaviour.
Read more Information on reporting poor R&D tax relief service standards and access to the mailbox.
New R&D interactive guidance
R&D interactive guidance has been launched to assist R&D taxpayers with decision-making when considering claiming R&D tax relief.
- Use this tool to check if a project includes activities that qualify for tax purposes.
- The tool aims to support businesses and signpost relevant guidance and support.
- The tool gives HMRC's view on whether a project involves R&D for tax purposes based on the information provided.
- The tool needs to be completed accurately based on the facts of each project.
- A competent professional must answer some of the questions in the tool.
- It is not mandatory to use the tool, however, the aim is to support those businesses that may be considering making an R&D tax relief claim.
See New R&D tool and statistics 2023-24
External link