In this week’s miscellaneous updates, the latest Stakeholder Digest from HMRC confirms that it’s new Permanent Secretary and CEO has taken up his office and the expected reductions in HMRC’s interest rates have been announced after the Bank of England Monetary Policy Committee reduced the base rate last week from 4.5 percent to 4.25 percent. The first changes in four years have been made to HMRC’s CEST (check employment status for tax) tool and HMRC has updated their genuine communication guidance to add information about ongoing research into agent and professional standards which means that some tax agents may receive an email or phone call from HMRC inviting them to participate. The latest newsletter from the Federation of Small Businesses (FSB) says that the ‘taxi tax’ must be stopped and small business employers are invited to take part in FSB’s latest survey on the National Living Wage by 19 May. And finally, the Public Accounts Committee (PAC) has published a report on the cost of the tax system which not surprisingly concludes that the cost of administering taxes is increasing for HMRC and taxpayers.
New HMRC Permanent Secretary and CEO
After the retirement last month of Sir Jim Harra, John Paul (JP) Marks joined HMRC as its new First Permanent Secretary and Chief Executive. JP has been a civil servant for over two decades and previously served as Permanent Secretary of the Scottish Government for three years. In a You Tube video to mark the occasion, JP introduces himself and sets out his key priorities.
CEST updated
On 30 April 2025 HMRC updated this tool which is used to find out if a worker on a specific engagement should be classed as employed or self-employed for tax purposes. According to HMRC, CEST has been updated to simplify its language; useful links have also been added. The update also features a new mutuality of obligation question (the obligation on the employer to provide work and the employee to accept the work) which is often key to many decisions at tax tribunal.
HMRC has reaffirmed its ongoing commitment to the tool saying it will stand ‘behind the outcomes of this tool where it has been used correctly.’ Updated guidance is therefore expected to be published on how to answer the questions in the tool which have changed.
PAC reports on cost of the tax system
The House of Commons PAC report on the cost of the tax system concludes that the cost of administering taxes is increasing for HMRC and taxpayers and as a result calls for HMRC to “publish realistic plans to simplify the tax system and establish robust metrics for reporting the impact on its costs, and on taxpayers’ costs, in its annual reports”. The report also says that taxpayers’ trust in HMRC is falling and recommends that HMRC should work with taxpayers and their representatives to understand why this is the case and what it can do to quickly address the decline. HMRC should publish the concerns it has heard and the actions it is taking to address these, as a first step to improving trust.
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