Employer Bulletin: December 2025

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

employer bulletin

Student and postgraduate loans thresholds and rates for 2026-27

The new student loan plan type and postgraduate loan thresholds and rates have been announced by the Department for Education. 

The thresholds from 6 April 2026 are:

  • Plan 1: £26,900
  • Plan 2: £29,385
  • Plan 4: £33,795
  • Plan 5: £25,000
  • Postgraduate loan: £21,000

Deduction rates from 6 April 2026 for:

  • Plan types 1, 2, 4 and 5 remain at 9% for any earnings above the respective thresholds.
  • Postgraduate loans remain at 6% for any earnings above the threshold. 

HMRC are updating the starter checklist ahead of the new tax year for 6 April 2026 to:

  • Add a new student loan plan type 5 checkbox to the checklist.
  • Clarify options for taxpayers with multiple loan types. 
    • Employees will now only be able to select one plan type loan, i.e. 1, 2, 4 or 5, on the online version, but can still select postgraduate loan at the same time as plan type loans.
    • Additional guidance has been added in the forms to support taxpayers with multiple loans and to help employees identify their repayment loan type.

See Student Loans

Changes take effect 6 April 2026: prepare for new PAYE responsibilities in labour supply chains

From 6 April 2026, significant changes to PAYE responsibilities will come into effect for labour supply chains that include umbrella companies. 

  • If you are an agency or end client, the rules mean that you are responsible for making sure PAYE is operated correctly when an umbrella company employs your workers. 
  • If HMRC find an umbrella company has not paid the correct amount of PAYE, they may recover it from the agency or end client.

To help you prepare, HMRC have published guidance on these changes to umbrella company rules and updated their Employment Status Manual. 

  • This provides details on how the changes will tackle non-compliance in the umbrella company market, and what it means for businesses.

Early preparation is essential; get ready ahead of April 2026 by:

See Agency workers: Umbrellas & anti-avoidance PAYE rules

Reminder: employees can find their National Insurance Number (NINO) online

Employees can use HMRC's Online service to find their NINO. They can either:

  • View it in their online account.
  • Download it to their digital wallet.
  • Request a letter.

Keep your PAYE Settlement Agreement (PSA) details up to date

HMRC has noticed a recent increase in incorrect taxpayer details.

  • It is important that HMRC have your current company name and address on file.
  • If your details are out of date, it could cause delays or result in important letters being sent to the wrong address.

You can update your company name or address with HMRC by either:

  • Calling them on 0300 200 3200.
  • Writing to them at:
    • PAYE Settlement Agreements
      HM Revenue and Customs
      BX9 2AN

See PAYE Settlement Agreements

Penalties for late submission of P11D and P11D(b)

HMRC has issued the first penalties to employers who have failed to comply with deadlines for submissions of P11D and P11D(b) for the tax year ending 5 April 2025. 

  • You must submit all outstanding forms to avoid future penalties.
  • All P11D and P11D(b) submissions for the 2024-25 tax year were due by 6 July 2025.

You can submit any outstanding forms online using either:

  • HMRC's PAYE online service for up to 500 employees.
  • Commercial payroll software.

You must send in a P11D(b) if you payrolled your 2024-25 benefits to declare Class 1A National Insurance Contributions (NICs) due. 

If you have not provided any expenses or benefits in the 2024-25 tax year, you only need to declare a no return if you have been notified to do so by HMRC.

If you have made a mistake, you need to complete an online expenses and benefits P11D or P11D(b) amendment form.

  • This is a requirement for all amendments to incorrect submissions.

See P11Ds: Employers' checklist & top tips and Penalties: P11Ds

Clarifying the Optional Remuneration Arrangement (OPRA) rules

HMRC are aware of third-party scheme providers advertising salary sacrifice schemes, such as grocery vouchers, which incorrectly claim they can make savings on employer NICs, with HMRC approval.

  • HMRC does not approve businesses to advertise their schemes as tax compliant. 

While a third-party provider may present a scheme as tax-efficient, ultimate responsibility for tax and NICs rests with the employer. 

  • Employers must independently verify scheme compliance with regulations. 

The OPRA rules, introduced in April 2017, largely removed the tax and NICs advantages for benefits provided through salary sacrifice arrangements. 

  • This was to address the use of these arrangements where employees agree to give up a portion of their earnings for a benefit, resulting in lower Income Tax and NICs compared to receiving the full amount in cash. 

Section 62 ITEPA explains that a benefit is provided under OPRA if an employee gives up current or future taxable earnings for a benefit, or enters into any agreement to receive a benefit instead of earnings.

  • Where benefits are provided by way of vouchers or non-cash vouchers, earnings are based on the higher of the voucher's value or cost and the salary sacrificed. 

Non-cash vouchers provided through salary sacrifice, where the employer facilitates provision, must vary employment terms and conditions, are treated as earnings under NICs legislation and attract Class 1 NICs.

  • Arrangements not meeting specific exemption requirements in Schedule 3 of the Social Security Contributions Regulations 2001, will be subject to Class 1 NICs for both employer and employee. 

See Salary sacrifice & optional remuneration schemes (OPRA)

Important update regarding tax refunds

You or your employees may have recently received a letter or text message from HMRC informing you that you are due a tax refund. 

  • It is important to note that refunds are no longer issued automatically, so you will need to take action to be able to receive your money.
  • The quickest and easiest way to claim your refund, or to check if you are due one, is through the HMRC app:
    1. Open the app and navigate to the 'Pay As You Earn (PAYE)' section.
    2. If you are due a refund, you will see a green 'Claim' button showing the amount owed.
    3. Tap the button to start your claim, and your refund will be paid directly into your bank account within one week.
  • If you have not signed up for HMRC's online services, you can still claim your P800 refund online at 'tax overpayments and underpayments'.
    • You will need your P800 reference number from your tax calculation letter and your NINO.
  • HMRC will no longer automatically send a cheque after 21 days.

Payrolling of Benefits In Kind (BIKs)

HMRC have issued updated information to support employers' preparation for future changes to reporting BIKs.

The government announced in April 2025 that mandatory payrolling of BIKs and taxable employment expenses would come into effect from April 2027, rather than April 2026.

  • This is to give additional time for employers, payroll professionals, software providers, tax agents and others to prepare.

Since April 2025, HMRC have been working on providing more detailed interim guidance to help employers prepare for the changes to reporting BIKs from April 2027. This draft guidance and legislation:

  • Explains what employers need to think about when preparing their employees and their payroll functions for real-time reporting from April 2027.
  • Includes worked examples of how the taxable values of specific BIKs can be calculated.
  • Includes draft legislation to aid understanding of the changes to reporting BIKs to HMRC from April 2027.
  • Confirms that a registration service for the voluntary payrolling of employer-provided loans and accommodation, the most complex of BIKs to report, will be launched from November 2026.

HMRC encourage employers to review the latest interim guidance, which explains what you need to understand and do to prepare for the upcoming changes, such as making a list of all BIKs you provide and usually report to HMRC using the P11D form.

  • Ensure that your payroll software and processes are capable of real-time reporting of BIKs and comply with HMRC's requirements.
  • You should inform your HR and payroll teams about the changes and make sure they receive appropriate training about processing and reporting BIKs. 

Additionally, to assist software providers, HMRC sent technical documentation to software developers in November 2025 that detailed planned changes to Real Time Information (RTI).

Final guidance will be published ahead of mandatory payrolling of BIKs coming into effect in April 2027.

See Mandatory payrolling of benefits from 2027: Briefing

Salary sacrifice reform for pension contributions

At Budget 2025, the government announced that from April 2029 an employer and employee NICs charge will be applied on employer pension contributions made by salary sacrifice above a threshold of £2,000 per annum. 

  • Pension contributions made by salary sacrifice will remain exempt from Income Tax.
  • Employers will need to report the total amount sacrificed through their existing payroll software.
  • HMRC will engage with stakeholders on the operation of this cap, and guidance will be published at a later date.

See Employment Taxes: Autumn Budget 2025

Help your contractors steer clear of tax avoidance

If you have contractors working for you through umbrella companies, HMRC would encourage you to share HMRC's 'don't get caught out' campaign with them.

  • This will help your workers steer clear of tax avoidance.
  • HMRC's campaign provides online guides that explain how to spot tax avoidance, with interactive tools to check payslips and contracts to confirm the right amount of tax is being paid.
  • Personal stories of people who have been caught up in tax avoidance can be viewed through the 'don't get caught out' campaign page.
  • There is also a YouTube video explaining how umbrella companies work.

Support is available to contractors who need to leave and report a tax avoidance scheme. 

  • Helping them to get back on track and settle their tax affairs quickly to prevent bigger tax bills.

HMRC never approves tax avoidance schemes, no matter what some promoters claim. 

Employment Rights Bill Autumn consultations

The Plan to Make Work Pay aims to modernise HMRC's employment rights legislation, extending the employment protections already given by the best British companies to millions more workers across the country. 

  • On 1 July 2025, the government published the Employment Rights Bill Implementation Roadmap.
  • As set out in the roadmap, the government is taking a phased approach to engagement and consultation on these reforms, ensuring that employers have the time and space to work through the detail of each measure and to help HMRC implement them. 

On 23 October 2025, the government published four consultations:

The Department of Business and Trade will take a phased approach to consultations.

  • These, along with further consultations planned for 2025 and early 2026, will help shape the legislation, supporting government to deliver reforms that are both effective and inclusive. 

Advance funding for statutory maternity, paternity, adoption or shared parental pay

Over the coming weeks, HMRC will be updating some of the links and options on GOV.UK relating to applications for advance funding for maternity, paternity, adoption or shared parental pay. 

  • This is part of a gradual process of modernising HMRC's systems and will only affect a small number of digital pathways.
  • Some users may notice minor changes to some of the options available, but most will not notice any difference. 

From mid-December 2025, all users of the service will be asked to provide an email address and agree to be contacted if HMRC need more information about a claim.

  • Taxpayers will have the option to decline this and to continue corresponding with HMRC by letter. 

Cyber Action Toolkit

Recent figures show that 42% of small businesses reported cyber breaches in 2024, evidencing the importance for businesses to build their cyber resilience.

  • The National Cyber Security Centre (NCSC) has recently launched the Cyber Action Toolkit.
  • This is an interactive tool designed to help sole traders and small businesses to strengthen their cyber defences.
  • It has been developed to be easy to use and provide simple steps for businesses, with advice tailored to business size and needs. 

Tell ABAB survey report now live

The Admin Burdens Advisory Board (ABAB) is an independent body representing small businesses. 

  • ABAB challenges HMRC on their performance, from a small business perspective, providing robust scrutiny against key initiatives, such as Making Tax Digital and improving taxpayer experience.
  • ABAB are passionate about listening to and understanding the needs of the small business community. 
    • Board members come from a range of businesses and professions, and their goal is to support HMRC to make the tax system quicker and simpler for small businesses. 
  • One of the key ways ABAB gather small business insight is through the "Tell ABAB Survey" which is conducted annually.
  • The Tell ABAB report 2024 to 2025 was published on 31 October 2025.
    • This report gives a commentary around survey findings and provides crucial insight on the big issues faced by small businesses, including those who identify as tax agents, in the tax system.

See ABAB report finds slight improvement in interaction with HMRC

Construction Industry Scheme (CIS) repayment delays

HMRC are aware of backlogs in processing CIS tax repayment claims submitted by limited companies or their agents.

  • These claims are subject to manual checks to ensure accuracy and protect both taxpayers and public funds from fraud and error. 

Due to a combination of factors, some repayments are currently taking longer than expected.

  • HMRC understand the impact this can have on businesses and are sorry for any inconvenience caused.
  • HMRC are actively deploying additional resource and refining processes to improve turnaround times. 
    • This includes increasing staffing across phones, post and casework.

You can Check when you can expect a reply from HMRC.

Claim Child Benefit on the HMRC app or online

There is no limit to how many children you can claim Child Benefit for.

  • It is worth £1,355 a year for your first child and £897 a year for any and every additional child. 

You can apply for Child Benefit through HMRC's app. You can also use the HMRC app to:

  • See your State Pension forecast.
  • View your NICs and any gaps.
  • Check your tax code and NINO. 

From April 2026, taxpayers using HMRC's app and online services will also start to gradually get notifications, reminders and updates digitally rather than by post.

External link

December 2025 issue of the Employer Bulletin