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From April 2025, The Income Tax (Additional Information to be included in Returns) Regulations 2025 will require additional information to be declared for 2025/26 tax returns onwards.

In March 2024, the UK Government consulted on two measures and a 28 January 2025 response tells us the way forward:

 

Measure

Yes / No

Additional information on tax returns

Yes

Reporting hours on RTI returns

No

 

ICB has already written about the abandonment of the requirement to put hours on RTI submissions, so this article focuses on the first measure.

 

From April 2025, The Income Tax (Additional Information to be included in Returns) Regulations 2025 will require the following additional information to be declared for 2025/26 tax returns onwards, i.e. the tax year that commences 06 April 2025:

 

Individual, Trustee or Partnership Returns

 

Additional information will need to be provided regarding the start and end dates of business activity.   This information is voluntary at the moment but will become mandatory from tax year 2025/26.

 

For returns, this means the gathering and reporting of the start and end dates of self-employment.  In turn, the Explanatory Memorandum to the 2025 Regulations says that this will mean HMRC will have more information about businesses that have ceased  trading.

 

Individual Returns

 

The additional information gathering and reporting is more significant and, in addition to the above start and end dates of periods of self-employment, the return will have to indicate:

 

  • Whether the taxpayer was a company director in the tax year; and, if so
  • Whether the company was a ‘close company’ (as per the definition in The Corporation Tax Act 2010);
  • If the taxpayer was a director of a close company, the name and registered number of that close company;
  • The amount of dividend income received by the taxpayer from the close company (which could be zero), and
  • The highest percentage of the taxpayer’s shareholding in the close company and if it has changed from the previous tax return

 

For Bookkeepers

 

The Explanatory Memorandum to the legislation says that the requirement to submit additional information on returns will have a significant impact on:

 

  • Up to 1.2 million self-employed businesses each year;
  • 2.0 million PAYE-registered businesses, including civil society organisations; and
  • Up to 0.9 million directors of owner-managed businesses

 

This will also have significant cost impacts, as outlined in the draft Statutory Instruments impact document which remains valid.  These are both one-off costs of £9million and on-going costs of £9.6million.  These are all to do with familiarisation, data gathering and reporting.  Apart from IT system changes, there are no cost implications for HMRC, as this measure is totally about improving the data that they hold.

 

HMRC have said that guidance will be available when these Regulations come into force at the start of tax year 2025/26.  As the Explanatory Memorandum says, this does impact small and micro businesses and the updated guidance will help minimise the impact.  However, this is only in terms of familiarisation with the new requirements.  The costs involved in gathering and reporting will still remain a consideration for ICB members.

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