Last week’s Spring 2025 tax update, badged by HMRC as the TUSAR (‘Tax Update on Simplification, Administration and Reform’), included a range of measures and also announced that the mandatory payrolling of benefits-in-kind (BIKs) is being delayed one year to commence from the revised date of April 2027. This follows concerns expressed by stakeholders, including this Institute, that there was insufficient time to prepare. Chartered Accountants Ireland is represented on the HMRC Employer and Payroll stakeholder forum which discusses such matters. Below we outline some of what was announced last week in the Exchequer Secretary to the Treasury’s Written Ministerial Statement. Information on all the TUSAR measures announced can also be found in the Tax update 2025 page on GOV.UK.
Mandatory payrolling of BIKs
HMRC has published an updated technical note which provides more operational information on how employers can work towards adapting to these changes in time for April 2027.
Valuation Office Agency
Functions of the Valuation Office Agency (VOA) will be integrated with HMRC by April 2026. According to the Government, moving the VOA’s functions into HMRC will help to improve the experience of taxpayers. This change also aims to deliver change more quickly and effectively, by combining the expertise and experience of both organisations in policy, valuations and programme delivery.
Income Tax Self-Assessment (ITSA) criteria changes
As previously announced, the Government intends to change ITSA income reporting thresholds within this parliament. This will change how taxpayers report income below the thresholds to HMRC. The £1,000 tax-free trading income allowance will remain the same.
This change will align three ITSA reporting thresholds for income at £3,000 (gross) each by:
- increasing the ITSA reporting threshold for gross trading income from £1,000 to £3,000,
- increasing the reporting threshold for other taxable income from £2,500 to £3,000, and
- creating a single reporting threshold for property income at £3,000 gross (currently £2,500 profit or £10,000 gross income).
The Capital Goods Scheme (CGS)
Legislation will be introduced to increase the VAT CGS threshold for land, buildings and civil engineering works from £250,000 to £600,000 (exclusive of VAT). Computers will no longer be CGS assets. These changes will take effect at a later date within this parliament.
Tax Administration Framework Review (TAFR)
As part of the TAFR, the Government also published a summary of responses to the October 2024 consultation on new ways to tackle non-compliance which the Institute responded to in January 2025. This consultation explores ways to simplify and modernise HMRC’s approach to correcting taxpayer inaccuracies. The response document sets out the government response and next steps for HMRC which includes further considering reform of revenue correction powers, approaches to taxpayer self-correction and longer-term work to develop and test policy options to harmonise and simplify compliance powers across tax regimes.
Combined with the newly launched consultation on improving HMRC’s approach to dispute resolution, the Governments says that the publication of these documents, along with other announced last week, represent a significant milestone in TAFR policy development.
HMRC is holding a launch event for the above two documents at 10:00 – 10:45 on Thursday 15 May. This will provide a brief overview of the contents of the documents, how you can get involved and provide feedback. If you would like to attend, please email tafrcompliance@hmrc.gov.uk. HMRC will also be holding two online workshops on improving HMRC’s approach to dispute resolution, over the consultation period. Dates and further details about the workshops will be available soon.
A range of consultation outcomes, new consultations and reviews were also announced details of which are summarised here (the information herein is taken verbatim from HMRC email and publications).
LOADING...