The Government released a number of tax updates and consultations on 28 April 2025 that will affect employers, business owners and self-employed individuals across the UK. Here’s a summary of the key announcements we think you should be aware of.
Payrolling of benefits in kind delayed until April 2027
The mandatory requirement to payroll most benefits in kind (BIKs), originally due to start in April 2026, has been pushed back by one year. The new start date is now 6 April 2027. This gives more time for employers, payroll software providers and tax agents to get systems in place.
From April 2027, most BIKs will need to be reported through payroll in real time, which can help reduce the need for P11D forms. However, two benefits – employment-related loans and accommodation – will remain voluntary for payrolling even after that date.
Update to the Check Employment Status for Tax (CEST) tool
HMRC has updated its CEST digital tool, which is used to help determine if a worker should be classed as employed or self-employed for tax purposes. The revised version, launched on 30 April 2025, is designed to be easier to use and clearer in its guidance.
HMRC has also confirmed it will stand by the result the tool gives, provided it has been used correctly. This provides some reassurance for businesses engaging contractors or freelancers.
NIC refunds process to be improved
The Government has announced a review of the process for refunding overpaid National Insurance Contributions (NICs) under the annual maximum rules.
If you have multiple jobs or a combination of employment and self-employment, you might end up paying more NICs than required across the year. Currently, a refund must be claimed manually from HMRC. The proposed review aims to simplify and speed up this process.
Proposed changes to the VAT Capital Goods Scheme
Changes have been proposed to the Capital Goods Scheme (CGS), which is a mandatory VAT adjustment mechanism for certain capital assets used over time.
The proposals include removing computers from the scheme altogether and increasing the threshold for land and buildings within the CGS from £250,000 to £600,000. This means fewer property purchases would fall under the scheme. No date has been announced for these changes yet.
VAT consultation on business donations to charity
A consultation has been launched to explore new VAT reliefs for goods donated by businesses to charities. Currently, goods donated for resale may be eligible for relief, but the Government is seeking views on whether the same treatment should apply to goods donated for use by the charity or distribution to those in need.
This could be a welcome move for businesses regularly supporting charities through donated stock or supplies.
Need support?
As always, we’re here to help. If you’ve got questions about how these updates might affect your payroll, VAT, employment arrangements or NICs, speak to your client manager or get in touch with the team at A&C Chartered Accountants.
We’ll guide you through the changes and make sure you’re always one step ahead.