In this week’s miscellaneous updates, the fuel advisory rates applicable from 1 March 2025 are available and HMRC has launched a technical consultation on the impact of the reforms to the inheritance tax (IHT) reliefs, agricultural property relief (APR) and business property relief (BPR) in the context of trusts. The official rate of interest from 6 April 2025 has been set and the latest HMRC performance data is available. HMRC has appeared at the Public Accounts Committee (PAC) and it has been announced that the free joint filing service provided by HMRC and Companies House will close from April 2026. The Institute for Fiscal Studies (IFS) has published an article looking ahead to the Spring Statement later this month and the consultation outcome for ‘Tackling non-compliance in the umbrella company market’ has been published. 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 technical consultation on reforms to APR and BPR
At Autumn Budget 2024 the Government announced controversial changes to APR and BPR for IHT from 6 April 2026. The Institute has previously highlighted to the Government its concerns in relation to these changes particularly in the context of Northern Ireland family owned businesses and farms. These changes will also impact on the IHT payable by trusts comprising property that qualifies for APR and/or BPR where the value of that property exceeds £1 million. The Government has now launched a technical consultation on the application of this £1 million allowance for property settled into trust qualifying for 100 percent APR/BPR. Note however that this consultation is very limited in scope and focuses solely on the technical implications for trusts containing agricultural or business assets. As previously advised by HMRC, the wider policy change announced in the Autumn 2024 Budget is not being consulted on.
As a technical consultation, this is running for a shorter period of time and closes on 23 April 2025. Responses can be submitted by using the online form or by sending responses to aprbpr.consult@hmrc.gov.uk.
Official rate of interest
The Taxes (Interest Rate) (Amendment) Regulations 2025 sets the official rate of interest for calculating the benefit in kind on a beneficial loan at 3.75 percent from 6 April 2025. HMRC has also updated the tables of interest rates for beneficial loan arrangements to reflect the new rate with details of historic rates also available.
Latest HMRC performance data
The latest HMRC performance data has been published:
Members are encouraged to provide feedback on HMRC service levels by email to: tax@charteredaccountants.ie.
HMRC appears before PAC
HMRC appeared again recently at a PAC hearing where the Committee heard about the impact of fiscal drag amongst a range of other issues. At the hearing, HMRC’s current CEO Sir Jim Harra said ‘The freezing of the tax thresholds mean that more people come into the tax system so there are more people for us to deal with, it also means that more people go into higher rates and our experience is that people’s tax affairs become more complex. This year for example, we’ve seen a very significantly greater number of people whom we have to adjust their PAYE code because of bank and building society interest, and that has certainly driven more customer contact.’
The hearing also discussed why HMRC does not publish data on the cost of tax compliance for individuals, the high level of senior staff in HMRC, and the increasing cost of VAT and corporation tax administration.
The hearing is part of the PAC’s inquiry ‘The Cost of the Tax System’ which was opened in response to the National Audit Office’s report on the drivers of cost in the tax system. A full transcript of this appearance will be available on the parliament website in due course.
Free company filing service to close from April 2026
In an announcement last week, it was confirmed that from April 2026 the Government’s free online accounts and company tax return service will close meaning small businesses that primarily use this service to file their accounts and company tax returns at the same time with Companies House and HMRC will need to use commercial software for filings on or after 1 April 2026. The announcement comes as a surprise and was not consulted on.
From 1 April 2026, companies will only be able to file their annual accounts with Companies House using third party software, web services, or paper filing. However, it will only be possible to use software to file company tax returns with HMRC from 1 April 2026.
IFS looks ahead to the Spring Statement
In an article looking ahead at the Spring Statement which will take place later this month on Wednesday 26 March, the IFS asks ‘what are the Chancellor’s options if – and it is very much an if – the upcoming Spring Forecast puts her on track to miss her fiscal target?’ The IFS notes that economic developments since the autumn mean that it is possible, but not guaranteed, that the Chancellor will now be missing one or both of the fiscal rules under the Office for Budget Responsibility’s updated forecasts and that this prospect is largely a result of her own earlier decisions. According to the IFS, the Chancellor has two options:
‘The first option would be to prioritise policy stability. The Chancellor could reiterate her commitment to fiscal sustainability and her fiscal rules, but break the letter of those rules – despite them only being legislated in January – and delay any corrective fiscal action to the full fiscal event in the autumn. This would recognise that twice-yearly fine-tuning of tax and spending plans brings costs, and that in an uncertain world there is no meaningful economic difference between a forecast for a small current budget surplus in 2029–30 and a forecast for a small current budget deficit in 2029–30.
The second option would be to prioritise the fiscal rules. She could abandon her commitment to holding only one fiscal event per year (at the first time of asking), and announce tax rises or (even) tighter spending plans at the Spring Forecast to achieve a forecast for a current budget surplus in 2029–30. The Chancellor might worry that breaching the letter of her ‘non-negotiable’ rules could send an unwelcome signal and affect financial market participants’ perceptions of this government’s ability or willingness to take difficult fiscal decisions. Delaying decisions to the autumn could also make it harder to adjust public service spending plans (given that multi-year departmental settlements are to be agreed in June) and trigger months of speculation about possible tax rises in the Autumn Budget.’
If the Spring Statement contains tax changes, we will report on these in due course in Chartered Accountants Tax News.
Tackling non-compliance in the umbrella company market: consultation outcome
The Government has published the consultation outcome to ‘Tackling non-compliance in the umbrella company market’. As a result, the Employment Rights Bill will be amended to define ‘umbrella companies’ and provide for their regulation by the Employment Agency Standards Inspectorate and the new Fair Work Agency (when this body is established).
It was also confirmed that, as announced at the Autumn 2024 Budget, the Government will bring forward legislation to move the responsibility to account for PAYE from umbrella companies that employ workers to recruitment agencies that supply their labour to an end client. This will take effect from April 2026 with consultation expected on the draft legislation later this year
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