HMRC have published their April 2025 Agent Update. For bookkeepers, this contains developments and updates relating to the UK taxes HMRC collect and is broader in scope than the Employer Bulletin.
April’s edition is full on information and we highlight some of the issues covered under the headings used:
Tax
- The ‘Expanding the Cash Basis’ section details how this is the default for trading income and Updates have been made to cash basis guidance that detail who can use cash basis and the rules;
- Like the Employer Bulletin, the Update details the Student Loans thresholds and rates of deduction plus highlights the need for employers and agents to update payroll systems with a start notice of this is received from HMRC, regardless of whether income is high enough for a deduction to be made;
- There is a reminder that employers should pay the total amount due under a PAYE Settlement Agreement by 19 October (or by 22 October if paying electronically) and that HMRC recommends employers send their PSA calculation by 31 July. As their other guidance says, if the PSA is paid without submitting calculations, HMRC can’t verify what the payment is for or if it is correct;
- Like the Employer Bulletin, there is a section that talks about changes to company size thresholds for off-payroll working. From 06 April 2025, legislation changed the definition of a company classified as ‘small’. The Bulletin and Update both advise this has no operational payroll impact until 06 April 2027, at the earliest, because a company’s size is determined by reference to previous years;
- As we have covered on Wages Wednesdays, there is a section that reminds employers that 2025/26 sees changes to employer National Insurance percentages, Employment Allowance eligibility and the rate of Small Employers’ Relief;
Making Tax Digital for Income Tax (MTD IT)
As announced in the Spring Statement, the MTD IT phasing timetable is as follows:
- 2026 - gross income from self-employment and property over £50,000;
- 2027 - gross income from self-employment and property over £30,000; then
- 2028 - gross income from self-employment and property over £20,000
This section highlights:
- The benefits of signing up for testing now (prior to mandation);
- How you will need an Agent Services Account to take part in testing; and
- The 15 April 2025 communication that announced enabling multiple agents (main and supporting)
HMRC Agent Services
This section covers five topics:
1. Paying your PAYE and VAT bill by Direct Debit;
2. Updates to the Tax Agents Handbook and how this includes information about the new agent resolution service which was launched on 31 March 2025;
3. Tips for when you communicate with HMRC via post, perhaps highlighting that online is easier and more efficient;
4. Information about protecting customer data against malware; and
5. Confirmation that from 27 March 2025, HMRC paused the issuing of Self-Assessment repayments for new claims over the telephone (including the Agent Dedicated Line) and through webchat until further notice
For Bookkeepers
As always, ICB always recommends reading the Agent Update in its entirety and the advice in April is no different. The Update is a valuable resource for members that recognises the bookkeeping role may involve more than the provision of payroll services.
