HMRC have published their September 2025 Agent Update. This monthly newsletter highlights updates and developments relating to taxes collected by HMRC and we highlight some of the relevant issues covered under the headings used in the publication:
Tax
There are several topics in this section that relate to payroll:
1. From 06 April 2026, recruitment agencies (or, in their absence, end clients) will be accountable for Income Tax and National Insurance Contributions (PAYE) on payments to workers supplied through umbrella companies. HMRC’s guidance, based on draft legislation to be included in the Finance Bill indicates that to tackle non-compliance in the umbrella company market, although the liability to operate PAYE remains with the umbrella company, if there is an underpayment then HMRC can apportion the underpaid liability. Employers and agents need to ensure that the umbrella company supplying workers is operating PAYE correctly to avoid several liability and HMRC has also published guidance ‘Check how to reduce your risk of using an umbrella company who operates a tax avoidance scheme’;
2. The Update has two sections relating to National Insurance Contributions for internationally or globally mobile employees. The first advises that employers need to determine whether their employee was liable for National Insurance Contributions at the time the work was carried out. The second concerns action to take if the calculations need to be corrected;
3. The Update provides a scheduled fix to the Class 2 National Insurance (NICs) ‘issue’ that was highlighted in July’s Agent Update. This highlighted that some taxpayers with self-employed profits above £12,570 have seen a Class 2 NICs charge of £358.80 added to their accounts in error
Making Tax Digital for Income Tax (MTD IT)
This section is all about getting ready for this legal obligation starting April 2026. It highlights:
Don’t forget that Craig Ogilvie from HMRC will be speaking at the Bookkeepers Summit on 17 November.
HMRC Agent Services
This section highlights the following:
- HMRC’s ‘Don’t get caught out’ campaign designed to help people working as contractors to spot the warning signs of tax avoidance;
- A reminder that if there is an obligation to complete a Self-Assessment return for 2024/25, the registration deadline is 05 October 2025;
- A link to HMRC’s ‘Tax help for hustles’ campaign which highlights that there is a single £1,000 tax-free allowance for earnings which HMRC refer to as hustles (selling online, provisions of services etc). If the threshold is exceeded, income must be declared to HMRC;
- Information on how to recognise that an E-Mail from HMRC is genuine and links to the UK Government’s ‘Stop! Think Fraud campaign’; and
- An update on how the Winter Fuel Payment / Pension Age Winter Heating Payment in Scotland will be recovered if gross taxable income is over £35,000. This will be through the tax code if the taxpayer is in PAYE or Self-Assessment. Importantly, the update advises that there is no obligation to register for Self-Assessment, so taxpayers who are not in either will receive a Simple Assessment letter
For Bookkeepers
As always, ICB recommends the monthly Update as it does reflect that bookkeepers may provide services other than payroll.
