Agent Update 127 (January 2025)

HMRC have published their January 2025 Agent Update and we highlight some of the payroll issues covered:

Tax

• HMRC have changed the way that they handle repayment requests when an agent becomes insolvent and this section details how some repayments of Income Tax due to clients will be paid directly to them;
• As covered on the monthly Wages Wednesdays, the Update details how the Employment Income Manual has been updated regarding the tax treatment of Double Cab Pickups from 06 April 2025;
• HMRC has now reimplemented the ability to claim tax relief on work expenses (for example, professional subscription fees or mileage allowance) through an online P87 form.  Do note the link to the HMRC Policy Paper ‘Evidence required to claim PAYE (P87) employment expenses’

Self-Assessment

We repeat this section from December’s Agent Update as the 2023/24 tax return deadline is upon us:

• Agents online service for Self-Assessment where you can submit your client’s tax return, view their statements;
• The Income Record Viewer (IRV) where you can prepare and check tax returns with access to client’s pay from the last four years, employment records, pension (private and State) and tax codes;
• Check HMRC’s performance levels and the ‘When you can expect a reply’ tool; and
• The ‘Check if you need to send a Self-Assessment’ tax return tool’ and ‘Check if you need to tell HMRC about additional income’ tools

There is also the ‘Self-Assessment tips for tax agents’ guidance that was published in November 2024.

Making Tax Digital

MTD is being phased in from 2026 and the UK Government is extending the scope of this to capture sole traders and landlords whose income from these sources is over £20,000.  This will be by 2029 when the current Parliamentary term ends.  So, the 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
• By 2029 - gross income from self-employment and property over £20,000

December’s update highlighted the MTD toolkit for agents and January’s highlights a series of events they are holding:

• Monday 24 February 2025 — Leeds;
• Tuesday 04 March 2025 — Belfast;
• Thursday 27 March 2025 — Edinburgh 

These require registration.

Agent Services

This section details that the redesigned tax agents handbook is now live on GOV.UK.  HMRC say that this is a redesign of the previous tax agents and advisers guidance collection, presenting information about authorisations, registering for services, contacting HMRC, and other useful guidance and support.

For Bookkeepers

For bookkeepers, the Agent Update contains developments and updates relating to the UK taxes HMRC collect and is always broader in scope than the Employer Bulletin. 

ICB always recommends reading the Agent Update in its entirety and January’s advice is no different.  The Update is a valuable resource for members because it recognises the bookkeeping role may involve more than the provision of payroll services.