HMRC Spring Tax Update

In April 2025, the Government made several tax policy announcements, launched consultations and confirmed previously announced developments. Key points included:

• Mandatory payrolling of benefits in kind (BIKs) will be delayed until 6 April 2027, this was originally planned to be introduced from 6 April 2026. This is to give more time for software providers, employers and tax agents to prepare for the change. HMRC do currently allow most benefits to be payrolled on a voluntary basis, however this does not apply to inexpensive loan and accommodation benefits.
• HMRC revised its Check Employment Status for Tax (CEST) digital tool on 30 April 2025, to make it easier to use. HMRC is committed to standing behind the outcomes of the tool where it has been used correctly. HMRC has published guidance on how to answer the revised questions. The tool is used by workers to help them determine whether their work on a specific engagement should be classed as employed or self-employed for tax purposes.
• If you have multiple employments or are both employed and self-employed, a cap (the ‘annual maxima’) limits the total National Insurance Contributions (NICs) you need to pay. If you pay more than you need to, you can make a claim for a refund from HMRC at the end of the tax year. The Government have said that the process for refunding NICs under the annual maximum rules will be reviewed to make it easier and faster for taxpayers to access refunds. Please note when an individual has an employment and a self-employment this in most cases can be resolved through the Self-Assessment Return.
• The VAT Capital Goods Scheme (CGS) is a mandatory scheme that ensures the VAT reclaimed on certain capital assets reflects the extent to which the asset is used for taxable business purposes over a prescribed time period. The Government has announced proposals to remove computers from the list of capital assets within the scheme and to increase the VAT-exclusive value of land and buildings that are caught by the scheme from £250,000 to £600,000. No date for these changes has been announced.
• A consultation has been published on the VAT treatment of business donations of goods to charity. Views are sought on a new VAT relief aligning the treatment of goods donated for distribution to those in need or use by the charity with the existing relief for goods donated for onward sale.

If you have any queries, please get in touch with Joe Wilson on 023 8046 1237 or email Joe Wilson.