At the Autumn Budget 2024, the government committed to bring forward a package of measures in Spring 2025 aimed at simplifying the tax and customs system. This package of measures was launched on the public on 28 April 2025 via a Ministerial Statement from James Murray, The Exchequer Secretary to the Treasury. Amongst these changes were some updates to policy in the sphere of employment taxes:
Employment Related Securities – National Insurance Changes
Where transactions in certain shares and share options give rise to taxable employment income, it is possible for employers and employees to transfer any Employer’s National Insurance liability to the employee.
In the past such arrangements have required pre-approval from HMRC in order to be effective. However, from 1 May 2025 it is now possible to agree such a transfer of liability without pre-approval, as long as the documentation used to make the agreement has itself received HMRC approval. Transfer employer’s National Insurance to employees - GOV.UK
Mandatory payrolling of benefits-in-kind
The P11D form used for reporting benefits-in-kind to HMRC has had a stay of execution. It had been the Government’s intention to introduce mandatory payrolling of such benefits from 6 April 2026, meaning that the last of the P11D returns would have been submitted by July 2026. However, the need for further time to develop software and other systems required for the change to payrolling has been recognized and mandatory payrolling will now commence on 6 April 2027.
Employers can still payroll benefits in kind on a voluntary basis by agreement with HMRC. Registration for the current (2025-26) tax year is closed but it is still possible to sign up for payrolling for the 2026-27 tax year.
Employment Status
HMRC’s online Check Employment Status For Tax tool (“CEST”) has received a major overhaul following long-standing criticisms over the wording of some of the questions used to establish whether an individual is self-employed or the status of an arrangement for IR35 purposes.
It is hoped that the clearer wording used will provide more accurate responses and reduce the number of inconclusive results that have been a feature of the tool over the last few years.
And finally..
The ministerial statement also confirmed the January 2025 announcement that plans to require employers to include details of employees’ working hours as part of PAYE Real Time Information (RTI) returns have been shelved in recognition of the potential administrative burden that the change would have imposed on employers. The change had already been pushed back from April 2025 to April 2026 following the General Election. However, it has now been confirmed that the required legislative changes will no longer be progressed through Parliament.
Contacts
Employment Related Securities: Chris Blundell, Jon Harvey
Employment Tax and National Insurance: Richard Maitland, Gordon Thrower
Global Mobility: James Smith, James Steer
Human Resources Consulting: Stephanie Pote, Jo Rose
