This week’s miscellaneous updates – 26 May 2025

In this week’s miscellaneous updates:

• The controversy and disquiet over the Government’s plans to restrict the availability of 100 percent agricultural property relief (APR)/business property relief (BPR) for inheritance tax (IHT) continues to rumble on,
• The National Audit Office (NAO) has published a report on collecting the right tax from wealthy individuals,
• HMRC has been busy issuing further communications regarding the UK’s Pillar Two rules,
• HMRC is seeking feedback on the Senior Accounting Officer (SAO) notification and certificate submission process,
• A new online interactive tool has been launched to help businesses and individuals understand HMRC compliance checks,
• Read an article from KPMG summarising the tax implications of the UK’s recent trade deals with India and the US, and
• HMRC has confirmed that Measuring Tax Gaps 2025, which will provide an estimated tax gap for 2023/24, will be published next month on 19 June.
• The latest schedule of HMRC Talking Points live and recorded webinars for tax agents is also available for booking. Spaces are limited, so take a look now and save your place,
• And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected.

Government Committee of MPs says delay IHT reforms 

A report by the cross-party Environment, Food and Rural Affairs Committee is calling for the Government to delay announcing its final APR and BPR reforms until October 2026, to come into effect in April 2027, saying a pause in the implementation of the reforms “would allow for better formulation of tax policy and provide the Government with an opportunity to convey a positive long-term vision for farming.” It would also protect vulnerable farmers who would have “more time to seek appropriate professional advice”. 

In April, the Institute’s NI Tax Committee wrote to the Government on the same issue and also told the Government that the reforms need to be postponed in order to consult wider and reframe this policy change in a way that it is more effectively targeted. If reform is not an option, a range of potential mitigations were suggested in the letter which would curtail the impact.  

The Institute also responded in April to the related consultation ‘Reforms to Inheritance Tax agricultural property relief and business property relief: application in relation to trusts.’ 

National Audit Office report on collecting the right tax from wealthy individuals 

The NAO has published its report on collecting the right tax from wealthy individuals which examines the extent to which HMRC is well placed to support wealthy individuals to pay the right tax and intervene in good time if people get things wrong.  

The report concludes that although wealthy people contribute significant amounts of tax revenue to the Exchequer, the complexity of their affairs makes it more difficult to get their taxes right and presents more opportunities to deliberately not pay enough.  

In response to this concern, HMRC now publishes annual estimates of the tax gap for wealthy individuals, which it estimates to have been stable and low. According to the NAO, “HMRC deserves credit for increasing the amount of compliance yield. Its move towards more upstream casework has been an important innovation and has resulted in improved returns.” However, the scale of the increase in compliance yield from the wealthy raises questions about whether underlying levels of wealthy non-compliance are higher than HMRC previously thought. 

“There is too much uncertainty around the tax gap estimate for this group, notably for offshore wealth, to be confident that non-compliance is not far higher than HMRC has detected. HMRC is working to improve its estimate of the wealthy tax gap.” 

Pillar Two letters 

HMRC recently wrote on Pillar Two to businesses who do not have a Customer Compliance Manager (CCM). The letter contains information on Pillar Two registration and reporting requirements, OECD standardisation, and updated HMRC guidance. 

SAO notification and certification – feedback wanted 

HMRC is seeking feedback on its SAO notification and certificate submission process as it working on a project to build a new digital service for this via a short survey. According to HMRC, responses to the survey are confidential and will only be used for internal HMRC research purposes.