Tax update spring 2025: simplification, administration and reform summary

The government has announced a package of tax and customs administration and simplification measures that will collectively reduce administrative burdens to save taxpayers and traders time, and will increase certainty, allowing businesses to focus on adding value to the economy.

The main highlights are as follows:

Check Employment Status for Tax Digital Tool Revisions – HMRC is revising its Check Employment Status for Tax (CEST) digital tool with effect from 30 April 2025 to make it easier for users to use the tool. To support these changes, HMRC will also publish revised guidance that offers help on how to answer the revised questions.

Employment related securities – the employer’s National Insurance contributions (NICs) elections process – An employer can transfer the employer’s NIC liability to an employee who acquires employment related securities such as shares from the employer, in certain circumstances.

This change will simplify the process to make a joint election to transfer the liability by removing the requirement on the employer to submit the election form to HMRC for pre-approval, where the employer is using the election form template on GOV.UK. The simplification was introduced on 1 May 2025.

Reversal of requirement to report more detailed employee hours paid - As announced on 28 January 2025, employers will not have to provide more detailed employee hours data to HMRC from 6 April 2026.

Mandating the Payrolling of benefits in kind update - The government has announced that the mandatory reporting and paying of Income Tax and Class 1A NICs on benefits in kind via payroll software, will now be introduced from 6 April 2027 instead of 6 April 2026.

Income Tax Self Assessment criteria review - The Income Tax Self Assessment reporting thresholds for trading, property and ‘other taxable’ income will be aligned and changed to £3,000 (gross) each. The changes will take place within this Parliament, with further detail set out on publication of the transformation roadmap later this year.

Voluntary NICs - enhancing check your state pension forecast service - The government has announced it intends to further enhance the check your state pension forecast service, which supports people who want to make payments for voluntary NICs to fill gaps in their National Insurance record.

Transfer pricing - scope and documentation - The government has published a consultation covering two proposals concerning changes to the UK’s transfer pricing rules. The first proposal would amend the current exemption from transfer pricing for small and medium-sized enterprises (SMEs), bringing medium-sized enterprises into scope of transfer pricing.

This sits alongside wider reforms that will largely give an exemption from transfer pricing for transactions wholly within the UK. The second would introduce a requirement for in-scope multinationals to report certain information to HMRC on their cross-border related party transactions by filing an international controlled transactions schedule.

Read more on gov.uk