The Autumn budget included several important changes that bookkeepers and payroll professionals should be aware of to support their clients effectively. Here's what bookkeepers need to know.
We have created a report which highlight the key announcements for bookkeepers and payroll professionals ICB Members can log in and download the report here.
Here is our overview of key updates:
Closing the Tax Gap: HMRC to Expand Compliance Efforts
HMRC aims to address the UK’s tax gap by adding 5,000 compliance staff, with an estimated revenue increase of £2.7 billion per year by 2029/30. To further enhance debt management, HMRC will also recruit an additional 1,800 staff, targeting an extra £2 billion per year in collected revenue. Upgraded debt case management IT systems are expected to drive efficiencies and better support compliance initiatives.
Simplifying the High-Income Child Benefit Charge (HICBC)
HMRC will allocate funds to pre-populate Self-Assessment tax returns with Child Benefit data to ensure accurate HICBC calculations. From April 2025, employed taxpayers can pay the HICBC through their tax code, making the process easier to manage. The initially proposed shift to a household-based HICBC system was canceled due to cost considerations, maintaining the current individual income assessment approach.
Making Tax Digital (MTD) Expands for Income Tax
In a phased rollout, MTD for Income Tax Self-Assessment (ITSA) will apply to sole traders and landlords earning over £50,000 by April 2026, and to those with incomes over £30,000 by April 2027. The rollout will likely expand further to include those earning over £20,000 before the end of this Parliament. ICB is committed to working with HMRC to update and inform the bookkeeping community on MTD.
Mandatory Registration of Tax Advisers to Begin in April 2026
Starting in April 2026, tax advisers working with HMRC on behalf of clients must register, a measure initially slated for 2028 but fast-tracked due to increased funding. This new requirement aims to improve standards within the tax advice market, ensuring consistent and high-quality representation for clients.
Changes to Late Payment Interest Rates
The Government announced an increase in the late payment interest rate on unpaid tax liabilities by 1.5% from April 2025. Now set at the Bank of England base rate plus 4% (up from the previous base rate plus 2.5%), this move is intended to encourage timely payments and maintain fairness for compliant taxpayers.
The ICB Budget report provides detailed analysis on these changes, with actionable insights for bookkeepers navigating the updated tax landscape. ICB members can access the full report on the ICB website and ensure you’re prepared to support clients with these significant updates.
