HMRC Stakeholder Digest - January 2025

Please see the following message from HMRC, which we are sharing for information:

The HMRC Stakeholder Digest provides a monthly round-up of our latest news and updates. We’d be grateful if you would share relevant information with your clients or members.

Filling National Insurance gaps to increase the State Pension

Customers have until 5 April 2025 to fill gaps in their National Insurance (NI) record dating back to 6 April 2006. After this date, payments can only be made for the previous six tax years.

Customers can check their State Pension forecast and find out if they might benefit from paying to fill NI gaps online or in the HMRC app. Guidance on how to download the HMRC app is on GOV.UK

To avoid delays in allocating payments to the NI record, we recommend customers use the ‘pay by bank account’  our online service. This payment method is fast, secure, and designed to prevent common errors that can occur during payment.

Errors and delays are more likely when paying outside of our service. For example, if the wrong amount is paid – even by a penny – the payment must be reviewed and the NI record updated manually, which can take up to eight weeks

New evidence requirements when claiming for employment expenses

To prevent ineligible claims for tax relief for employment expenses, customers now need to provide supporting evidence.

We want to make sure that customers get the tax relief they are entitled to in as straightforward a way as possible.

However, we also need to make sure that we identify where customers are not eligible and prevent them receiving tax repayments they are not entitled to. 

Customers who wish to claim tax relief for employment expenses can submit their claim and evidence online or by post.

More information about the evidence required to claim PAYE (P87) employment expenses is on GOV.UK.

Further advice about claiming tax relief for expenses can be found via HMRC’s ‘Don’t Get Caught Out’ campaign webpage.

Investment Zones – supporting economic growth

Investment Zones can benefit from £160 million of spending support and tax reliefs over 10 years. Meanwhile, the government has committed to providing £150 million for an Enhanced Investment Zone in Northern Ireland.

Some Investment Zones will include designated special tax sites — defined areas where eligible businesses can
claim a range of tax reliefs. Further information about designated special tax sites can be found on GOV.UK.

Designed to promote new investments in sectors vital to the UK’s industrial strategy, Investment Zones also aim to create skilled jobs.

To help businesses understand the potential benefits, we have published an Investment Zones information pack and additional guidance on GOV.UK.

Further details on the Investment Zone proposals in Scotland, Wales, and the Enhanced Investment Zone in Northern Ireland will be provided in due course.

Find out more about Investment Zones and how they could support economic growth by visiting GOV.UK

Get help with Basis Period Reform

From April 2024, sole traders and partners in a business will have to report their profits on a tax year basis, if they don’t do so already. This is known as Basis Period Reform.

Our ‘get help with basis period reform’ tool allows customers to request their overlap relief figures for Basis Period Reform.

If they have applied on or before the filing deadline of 31 January 2025 and have not received a response from us, they have until 28 February 2025 to file their return without incurring a late filing penalty.

They should enter a provisional estimated figure if they do not know the actual figure. Once they have their final overlap relief figure they should amend their return. Interest will still accrue from 1 February 2025 on outstanding amounts of tax.

Customers can get help with Basis Period Reform to calculate their provisional figure and get support with amending their Self-Assessment tax return on GOV.UK.

Test the new online pay calculator for umbrella company workers

We are inviting businesses and umbrella company workers to test a new online calculator that estimates their take-home pay.

This tool, confirmed in the 2024 Autumn Budget, allows users to input payslip information to work out take-home pay and verify deductions.

It can also be used to help employment businesses understand the pay of the umbrella company workers they supply.

The calculator breaks down key elements including assignment rates, gross and net pay, and standard deductions such as Income Tax, NICs and pension contributions.

Umbrella company workers can test the online calculator to work out their pay from an umbrella company on GOV.UK.

The tool is still being tested – you can help shape and improve the tool by sharing with your networks and submitting feedback directly through the calculator.

Update on new data requirements for employers

Plans announced under the previous government which would have required employers to provide more detailed employee hours data, through PAYE Real Time Information (RTI) returns from April 2026, have been withdrawn.

The government has listened to businesses and acted on their feedback about the administrative burden these requirements would have brought.

The requirements for the self-employed to provide start and end dates of self-employment and for company owner-managers to provide details of dividend income paid by their company, in their Income Tax Self Assessment (ITSA) tax returns are going ahead as planned.

These requirements will come into effect from 6 April 2025 and relevant guidance will be published with the 2025/26 ITSA return.

Messages on behalf of Other Government Departments

Tackling Benefit Fraud: New Public Authorities Bill

The government has introduced the Public Authorities (Fraud, Error & Recovery) Bill to protect taxpayers’ money and ensure public funds are used wisely. This landmark legislation empowers the Department for Work and Pensions (DWP) to take decisive action against benefit fraud.

Measures include the ability to disqualify offenders owing £1,000 or more from driving for up to two years if they fail to repay their debts, as well as new powers for investigators to secure search warrants and seize evidence such as computers and smartphones.

This Bill is expected to save £1.5 billion for DWP over the next five years, forming part of a broader effort to save £8.6 billion in the fight against welfare fraud and error. Safeguards are built into the legislation to ensure fairness and protect vulnerable individuals.

Read the full press release about the biggest fraud crackdown in a generation on GOV.UK.

For more information contact [email protected].