In this week’s detailed miscellaneous updates, all of which you can read more about below, HMRC has recently reduced its interest rates for late and overpayments of taxes and duties, and a detailed update has been sent on winter fuel payments which confirms that the deadline for opting out of receiving this is in two weeks’ time on 15 September 2025. In the latest HMRC Agent Update, you can read about a wide range of areas, and, in July, HMRC began trialling the withdrawal of certain corporation tax reminder letters.
In other news this week:
New HMRC interest rates
HMRC’s interest rates on underpaid and overpaid taxes and duties were recently reduced after the Bank of England base rate was cut by 0.25 percent to 4 percent last month. HMRC has now updated its associated guidance which confirms that the new rates are 8 percent for late payment interest and 3 percent for repayment interest. The new rates took effect from the following dates:
- 18 August 2025 for corporation tax quarterly instalment payments, and
- 27 August 2025 for other payments of tax and duties.
Winter fuel update
The new winter fuel payment policy will apply from winter 2025/26. The Social Fund Winter Fuel Payment Regulations 2025 were laid before Parliament last month and come into force on 15 September 2025, the first day of the winter fuel payment qualifying week in 2025/26. These regulations revoke the 2024 regulations and restore winter fuel payments to all pensioner households in England and Wales from winter 2025/26. The rules in Northern Ireland are set out here and work in a similar manner.
As previously announced, payments made to pensioners who are not in receipt of pension credit or another relevant means-tested benefit, and who have an annual income over £35,000, will be recovered by HMRC via the tax system. The provisions to achieve this are separate and will form part of the Finance Bill to be introduced after the next Budget, the date for which we expect to be announced in the next two weeks before the current parliamentary sitting goes into recess for conference season.
Together, the regulations and the provisions in the Finance Bill will form the legislative basis for means testing the winter fuel payment.
For pensioners in Pay As You Earn, HMRC will automatically collect the payment through a change to their tax code, unless they already file a Self-Assessment (SA) tax return. Changing the tax code will mean their winter fuel payment will be deducted from their income and paid to HMRC in monthly instalments across 2026/27, starting in April 2026.
If they file a SA return online, HMRC will instead automatically include the payment on their SA return as part of their income, starting in 2025/26. If they file a paper SA, the individual will need to include the payment on their return themselves. There is no impact on 2024/25 returns.
Pensioners who do not wish to receive a winter fuel payment can opt out of receiving an automatic payment. By opting out, those with an annual income over £35,000 will avoid having their payment recovered in full via the tax system at a later date.
Opting out can be done by:
Those that wish to do so should opt out before 15 September 2025 to ensure that the opt-out can be processed in time before payments are made. Anyone who does not opt out before 15 September will automatically receive the payment.
People who have opted out may choose to opt back in via the helpline. For the 2025/26 winter period, the final date for opting back in is 31 March 2026.
The Government is aware of a winter fuel payment text scam and asks anyone who has received this to report it to Action Fraud on 0300 123 2040. For more information on phishing and scams, go to www.gov.uk/report-suspicious-emails-websites-phishing.
HMRC also has reporting routes for tax specific scams. HMRC will never contact anyone by text to claim winter fuel payments or to request personal information. If someone is unsure about a text claiming to be from HMRC, the advice is to forward this to 60599. Emails should be sent to phishing@hmrc.gov.uk. Tax scam phone calls should be reported on GOV.UK via www.gov.uk/find-hmrc-contacts/report-suspicious-hmrc-emails-texts-social-media-accounts-and-phone-calls.
Latest Agent Update
Agent Update: Issue 134 is available now. Get the latest guidance and information on:
- Finance Bill 2025/26,
- Time to Pay for Simple Assessment debts,
- An update on using Import Control System 2 for goods movements by road or rail from Great Britain to Northern Ireland,
- Changes to overseas workday relief, and
- VAT registration: the effective date of registration.
HMRC trial withdrawal of corporation tax letters
In July 2025, HMRC began a new trial which means certain corporation tax (CT) return and payment reminder letters are no longer being sent to approximately 5 percent of companies with authorised agents. The affected reminder letters are the CT208 PR1 and CT208 PR2.
The Institute has been discussing this with HMRC and has flagged the particular impact this is likely to have to have on busy season for CT, in particular for filing 31 December CT returns and 31 December and 31 March CT payment deadlines. We are also concerned with the impact that this will have on newly trading companies as often the correct first accounting period of trading is not reflected in HMRC’s records. Members are welcome to contact us to discuss the impact of this trial by emailing tax@charteredaccountants.ie.
To be able to monitor the impact of this on CT debt, the trial will end in December 2025. However, HMRC has advised that if there is a substantial increase in CT debt during the trial period, it will be halted completely.
Other statutory CT letters, including the Notice to file a Company Tax Return, will continue as normal. All new companies will also continue to receive information on CT filing and CT payment.
HMRC are also trialling the removal of paper copies of other non-statutory CT letters. From June 2025, the following letters are no longer sent automatically:
- CT205/A return reminders for companies and agents,
- CT207 interest statement,
- CT209 payment receipt,
- CT603A agent list of issued notices to deliver Company Tax return, and
- CT608 instalment payment reminder.
HMRC has advised that information on the ongoing trial was previously communicated in the following publications:
- May Agent Update,
- June Employer Bulletin, and
- May Stakeholder Digest.
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