In this week’s miscellaneous updates, HMRC has confirmed that its interest rates will be reduced after the recent Bank of England base rate reduction and a consultation is taking place on HMRC statistics. From April 2025, the legislation which gives effect to the UK-Russia and UK-Belarus Double Taxation Treaties in UK law will be revoked and HMRC’s Guidelines for Compliance (GfC) have published the latest GfC on labour supply chain assurance. The latest schedule of HMRC Talking Points live and recorded webinars for tax agents are 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.
HMRC late payment interest rates to be reduced
HMRC has confirmed that its interest rates for late payments will be revised and reduced by 0.25 percent following the Bank of England interest rate cut to 4.5 percent. These changes will come into effect on:
- 17 February 2025 for quarterly instalment payments, and
- 25 February 2025 for non-quarterly instalments payments.
HMRC’s information on the interest rates for payments will be updated shortly.
Consultation on changes to HMRC statistics publications
On 16 January 2025, HMRC published a consultation seeking views on how the statistics they publish are used. HMRC recognises that it is important to engage with statistical publication users regularly and to consider whether publications remain of high value to them.
The aim of the proposals is to ensure that HMRC:
- continues to produce useful and relevant statistics for use by its stakeholders, adding to its existing statistics where appropriate, and
- adapts statistics publications to reduce what is produced for those which are no longer widely used, are duplicated elsewhere, or could be produced less frequently.
The consultation closes on 10 April 2025.
Revocation of UK-Russia/Belarus tax treaties
Following Russia’s unlawful action to suspend material provisions of the 1994 UK-Russia Double Taxation Convention and the 2017 UK-Belarus Double Taxation Convention, the UK continued to honour its treaty obligations. The UK requested that Russia come back into compliance with its international legal obligations. However, as it did not do so, the UK has now notified Russia of its intention to suspend the Convention.
The UK will therefore revoke the legislation which gives effect to these conventions in UK law. These will both cease to have effect from:
- 6 April 2025 for Income Tax and Capital Gains Tax, and
- 1 April 2025 for Corporation Tax.
The UK will continue to honour its obligations under the treaties until these dates. However, thereafter, there will be an increased risk of double taxation, with a need to rely on the relief (if any) available under domestic law noting the potential for this to be restricted by ongoing sanctions.
The following publications have therefore been updated:
New GfC on labour supply chain assurance
HMRC’s GfC team has published Help with labour supply chain assurance — GfC12. The guidelines are designed for larger organisations in the top tiers of a labour supply chain; however, the principles can be applied to most businesses. HMRC continues to tackle tax defaulters in labour supply chains directly. Many risks arise where there are opportunities to exploit larger, higher value, and more complex chains. HMRC is concerned about how these risks can affect a business’s own tax affairs.
These guidelines explain how taxpayers can self-assess their own assurance practices and aim to help taxpayers identify and limit the impact of risks.
The guidelines:
- explain what labour supply chains are and the associated risks,
- promote the importance of effective labour supply chain assurance, and
- provide practical advice to consider when carrying out labour supply chain assurance.
These have been produced using a different format than previous guidelines hence HMRC is keen to hear feedback on the new format. If you have any queries or feedback, please contact the GfC Mailbox. Alternatively, there is an anonymous survey in the Next steps, further questions and feedback section.
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