James Murray – Exchequer Secretary to the Treasury

This week, the government unveiled a significant package of updates aimed at simplifying and modernising the UK tax and customs system. Announced via a Written Ministerial Statement by Exchequer Secretary to the Treasury, James Murray, the Tax Update Spring 2025 introduces a number of measures that will affect how businesses report, comply, and interact with HMRC.

Whether you’re running a limited company, employing staff, or working across borders, these updates could impact your financial strategy, reporting obligations, and technology usage.

Let’s break down the key announcements and what they mean for your business.

1. Mandatory Payrolling of Benefits in Kind Postponed to 2027

Originally set for April 2026, the mandatory reporting of Income Tax and Class 1A NICs for most benefits in kind and taxable expenses has now been pushed back to 6 April 2027.

This gives employers crucial extra time to prepare and adjust their payroll systems.

➡️ If you need support preparing for this change, our Payroll Services ensure your business stays compliant and efficient—both now and as future regulations evolve.

2. Updated ‘Check Employment Status for Tax’ (CEST) Tool

HMRC has updated its digital CEST tool, making it more user-friendly without altering how employment status is determined. This is especially relevant for businesses working with contractors or freelance professionals.

➡️ For businesses navigating employment status and contractor relationships, our Contractor and IR35 Accounting Services offer clarity and compliance guidance.

3. Simplified NIC Elections for Employment-Related Securities

From 1 May 2025, employers can use a new pre-approved template for National Insurance Contributions elections related to employee share schemes—removing the need to submit the form for HMRC pre-approval.

➡️ We offer tailored support for businesses offering employee benefits—visit our Business Tax Planning page to learn how we help structure these efficiently.

4. Capital Goods Scheme Threshold Increase

Legislation is being introduced to raise the VAT Capital Goods Scheme threshold for land, buildings, and civil engineering from £250,000 to £600,000. Computers will also be removed from CGS assets.

This is a significant relief for property developers and firms investing in infrastructure.

➡️ If your business operates in property or construction, explore how our Property & Construction Sector Support can help you manage VAT and capital investments smartly.

5. Consultations on Transfer Pricing Reforms

Two consultations were launched focusing on international tax rules and transfer pricing:

  • Removing the transfer pricing exemption for medium-sized businesses.
  • Requiring multinationals to report related-party transactions via a new International Controlled Transactions Schedule (ICTS).

➡️ If your business operates internationally, our International Tax Services can help you navigate these evolving obligations.

6. VAT Relief on Business Donations to Charity

HMRC is consulting on ways to simplify VAT treatment for donations of goods to charity, balancing tax oversight with encouraging generosity.

➡️ We support charities and businesses alike—learn more about our Charity Accounting Services.

7. Improving HMRC Dispute Resolution

Feedback is being sought to improve access to HMRC’s dispute resolution and statutory review processes, including aligning direct and indirect tax appeal approaches.

➡️ Our Tax Dispute Support helps you resolve issues quickly and effectively—don’t face HMRC alone.

8. HMRC’s Push Towards Paperless Communication

Expect fewer letters through your letterbox—HMRC is digitising most of its communication to cut print and postage costs by £50 million annually. Paper post will still be available for critical communications and digitally excluded customers.

You can opt in to paperless communications via the HMRC app now.

How These Changes Fit Into the Bigger Picture

These updates are part of the broader Tax Update Spring 2025: Simplification, Administration and Reform (TUSAR) initiative, designed to streamline the UK tax landscape.

While many of the changes are future-facing, proactive planning now can help you avoid last-minute disruptions.

✅ Take Action Now

  • Review your current payroll and benefits-in-kind process.
  • Assess your use of contractors and employee status practices.
  • Revisit VAT treatment for capital investments or donations.
  • Get support with international tax or NIC elections.

At Worthwhile Accountancy, we’re here to guide you through change. If you’re not sure how these updates affect your business, get in touch today or book a free consultation.