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The 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 package covers measures to support economic growth by reducing burdens on employers and increasing certainty for businesses. It aims to modernise and reform HMRC systems and processes to simplify the experience for individuals and traders and covers measures to modernise outdated elements of the tax and customs system and tackle the backlog of reform.

Simplification and modernisation of the tax and customs systems

Reducing burdens on businesses to support economic growth

Capital Goods Scheme simplification

The government will simplify the Capital Goods Scheme by introducing the removal of computers from the assets covered by the scheme and increasing the capital expenditure value of land, buildings and civil engineering work to £600,000 (exclusive of VAT). This simplification will reduce the number of capital assets that would fall within the Capital Goods Scheme, therefore reducing the administrative burden on small businesses.

Spirit Drinks Verification Scheme simplification

The government will simplify the Spirit Drinks Verification Scheme, providing operators a significant reduction in the fees they pay to HMRC for verification. For operators whose current verification is due to expire on or after 1 July 2025, HMRC will charge a new flat fee of £250 per facility every 2 years for the next 3 fee cycles, delivering simplification and parity for the UK spirits industry.

Corporate Interest Restriction Administration simplification

The government will engage with stakeholders on opportunities to simplify and improve the administration rules for Corporate Interest Restriction and, in particular, reporting company appointments under the regime. HMRC will establish a working group with stakeholders to take this forward. Stakeholders with relevant technical expertise who wish to join the working group should email cirworkinggroup@hmrc.gov.uk.

Reform of UK law in relation to transfer pricing, permanent establishment and Diverted Profits Tax

The government has published a consultation on draft legislation for the reform of the UK’s international tax rules. The consultation includes proposed change to UK tax legislation in three areas:

• transfer pricing
• permanent establishment
• Diverted Profits Tax

This measure follows on from a policy consultation on these matters in summer 2023.

Electronic invoicing consultation

As announced at Autumn Budget 2024, the government committed to consult on establishing standards for the adoption of electronic invoicing (e-invoicing) within the UK. HMRC and Department for Business and Trade have now published a consultation on promoting e-invoicing across UK businesses and the public sector seeking views on the impacts that different e-invoicing models would have on UK businesses.

Reducing administrative burdens and increasing certainty for employers, and employees, to support economic growth

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. These changes will make it easier for CEST’s 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. HMRC is committed to standing behind the outcomes of this tool where it has been used correctly.  

Employment related securities — employer’s National Insurance contributions elections process 

An employer can transfer employer’s National Insurance contributions liability to an employee who acquires employment related securities such as shares from the employer, in certain circumstances. This measure 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 ÒÁÈËÖ±²¥. The simplification will be introduced from 1 May 2025.

Reversal of requirement to report more detailed employee hours paid 

As announced on 28 January 2025, the government will not be taking forward the draft Income Tax (Pay As You Earn) (Amendment) Regulations 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 National Insurance contributions on benefits in kind via payroll software, will now be introduced from 6 April 2027 instead of 6 April 2026.

HMRC has published an updated technical note which provides more operational information on how employers can adapt to these changes in time for April 2027 . This updates a technical note about confirming plans to mandate the reporting of benefits in kind via payroll software from April 2026 that was published at Autumn Budget 2024.

Modernising outdated elements of the tax system to simplify the customer experience  

Cultural Gift Scheme

The government will reform the Cultural Gift Scheme by removing the restriction on jointly owned objects and allowing tax credits to be used more flexibly. This will simplify the scheme by making it more accessible and improve take up.

VAT terminal markets order consultation — summary of responses

The government has published a summary of responses to the consultation on the legislative reform of the VAT terminal markets order. The government will continue to engage with industry stakeholders and representatives to develop a modernised legislative framework that will reflect current and future market practices, including for evolving areas such as emissions markets.

Tax Administration Framework Review compliance — improving HMRC’s approach to dispute resolution

The government has published a consultation seeking views on options for simplifying, modernising and reforming HMRC’s approach to dispute resolution. Reform is being driven by an aim to resolve cases earlier and more effectively with dispute resolution methods.

Tax Administration Framework Review compliance — new ways to tackle non-compliance — summary of responses

The government has published a summary of responses to the consultation on new ways to tackle non-compliance, which explored ways to simplify and modernise HMRC’s approach to correcting taxpayer inaccuracies. The summary of responses includes the government’s intention to consider further reform of revenue correction notices, approaches to taxpayer self-correction and broader reform of enquiry and assessment powers.

Reforming HMRC systems and processes to simplify individuals customer experience

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. This will remove the requirement for up to an estimated 300,000 taxpayers to submit a Self Assessment return, so that taxpayers are only required to do so where necessary.

People’s tax liability will not change, but people with taxable income below these new thresholds will be able to report their income through a new digital reporting service. Taxpayers will have a choice. They can remain in Self Assessment if they wish or use the new service.

The changes will take place within this Parliament, with further detail set out on publication of the transformation roadmap later this year.

Voluntary National Insurance contributions — 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 National Insurance contributions to fill gaps in their National Insurance record.

Reviewing National Insurance contributions annual maximum refunds process

The government will review the process for refunding National Insurance contributions under the annual maximum rules. Currently, customers who pay more than they are liable for can make a claim for a refund from HMRC at the end of the tax year. The government will review the process to make it easier and faster for customers to access the refunds they are entitled to.

Simplifying HMRC Guidance and Communications

Clarifying Self Assessment registration obligations

The government recognises that reporting requirements for taxable income must be easy for taxpayers to understand. HMRC will work with taxpayer representative organisations and stakeholders to ensure that guidance on when individuals need to register for Self Assessment is clear.

Simplifying the language used in HMRC letters

The government and HMRC will work with the Administrative Burdens Advisory Board and other stakeholders to simplify the language used in HMRC letters.

Ceasing Corporation Tax letters

The government announced that it will stop issuing 6 types of non-essential letters connected with Corporation Tax from June 2025.  This will bring down overall costs by reducing use of paper to communicate with customers. There will be no change to the overall Corporation Tax process.

Making it simpler for third parties to use HMRC guidance in AI-powered products and services

The government and HMRC will work with the Government Digital Service to explore how best to help businesses and other third parties leverage ÒÁÈËÖ±²¥ guidance in their own AI-powered products and services so taxpayers can benefit from the latest AI solutions to help them find the information they need.ÌýÌý  

Professional standards in compliance — improving guidance and support for customers in compliance checks

A new interactive compliance guidance tool is being developed within ÒÁÈËÖ±²¥ to provide a better understanding of what to expect and what needs to be done at each stage of a compliance check, making it easier for taxpayers to get things right and to understand their rights. The launch is planned for 30 April, and the tool will be continuously developed thereafter.

Simplifying customs processes, reducing trader burdens, improving customer experience, and ensuring there is a targeted and appropriate level of control on goods movements

Customs Digitalisation

The government has announced activity it is leading with industry and trade partners to support increased trade and customs digitalisation and modernise the way customs interacts with business. This includes:

• running a technical pilot with United States Customs and Border Protection to test solutions to speed up processes for US and UK businesses trading goods with each other
• establishing a cross-government and industry forum to foster adoption of electronic trade documents, through collaboration between government and the business community
• operating a pilot with industry partners to understand how HMRC systems could process electronic trade documents and assess how this could improve customs administration

Temporary Admission

The government has published its response to the 2023 call for evidence on Temporary Admission which announces a package of targeted improvements and simplifications to Temporary Admission. These changes will be legislated for and implemented in 2025. The changes include extending and simplifying time limits for some goods, removing some restrictions on who can use the procedure and what they can do with their goods, and making guidance easier to understand. Details have been published in the response to the call for evidence.

Post and Parcels Exports consultation

The government has published its response to the ‘Customs treatment of post and parcel exports — Export Memorandum of Understanding and Extra Territorial Offices of Exchange’ consultation which was launched in 2023. This announces a new authorisation scheme for Extra-Territorial Office of Exchange operators and their sites. It also sets out an intention to conduct a further review of the Export and Transhipment Memoranda of Understanding facilitations to clarify the rules.

Authorisation by Declaration

The government will increase how often importers can use Authorisation by Declaration from 3 to 10 times in a rolling 12 month period. This will be legislated and implemented in Summer 2025. Authorisation by Declaration is a simplified way to access some customs special procedures which relieve or suspend import duties, as it does not require the importer to apply to HMRC for an authorisation in advance.

Transit Improvements

The government will engage with stakeholders on a package of potential transit improvements to modernise the transit process. This engagement will seek to clarify:

• the benefits of introducing transit security accompanying documents to determine whether the UK should opt into offering them from a future date
• whether proposals to streamline the existing simplified process will reduce costs for businesses and encourage more transit movements to start at a business premises by:
  • removing the ‘time out period’
  • introducing more flexible controls
  • improving the authorisation process
  • facilitating compliant simplified movements departing standard export locations

Further tax policy and administrative announcements

Inland border facilities

The government has announced amendments to existing trader provided free legislation. This will mean that all border locations will be responsible for providing and funding their own customs infrastructure, including border locations where this infrastructure is currently provided and funded by the government at inland border facilities.   

Restitution interest — changes to Part 8C of the Corporation Tax Act 2010

The government has published a draft for technical consultation of regulations which will modify Part 8C of the Corporation Tax Act 2010 to make clear that the legislation applies only to awards made at a rate of interest greater than a statutory rate under the taxes acts. The regulations will also permit a Part 8C assessment to be made within two years of the end of the accounting period when the restitution claim is finally determined (if the normal assessing time limit has expired).

Reform

Single Remote Gambling Duty 

As announced at Autumn Budget 2024, the government has published a consultation on proposals to bring remote gambling (meaning gambling offered over the internet, telephone, TV and radio) into a single tax, rather than taxing it through the current three-tax structure.

Consultation on the VAT treatment of business donations of goods to charity 

The government has published a consultation on the VAT treatment of business donations of goods to charity. The consultation seeks views on a new VAT relief aligning the treatment of goods donated for distribution to those in need or use by the charity, with the existing relief for goods donated for onward sale.

Consultation on reform of Landfill Tax

The government has published a consultation on reform of Landfill Tax. The consultation seeks views on the government’s ambition to transition to a more circular economy, simplify the tax, reduce opportunities for error and non-compliance, and crack down on waste crime.

Transfer pricing — scope and documentation        

The government has published a consultation covering two proposals concerning changes to the UK’s transfer pricing rules.ÌýÌý

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.ÌýÌý

Vaping Products Duty — technical consultation response

The government has published its response to the Vaping Products Duty technical consultation, which sets out how it will implement the Vaping Duty Stamps scheme using hybrid physical duty stamps with digital elements which will enable tracing through the supply chain.

Soft Drinks Industry Levy review

The government has published a consultation on changes to the minimum sugar content threshold at which the Soft Drinks Industry Levy standard rate applies, and the removal of the current exemptions for milk-based and milk substitute drinks with added sugar, to ensure the Soft Drinks Industry Levy continues to encourage reformulation to help tackle obesity.ÌýÌý

Modernisation of the stamp taxes on shares framework

The government has published a summary of responses to the 2023 consultation that sought views on detailed proposals to modernise the stamp taxes on shares framework. The government has also published a consultation seeking views on aspects of the 1.5% higher rate charge, which applies to certain transfers of UK securities overseas, with a focus on reducing unnecessary legislation and improving clarity. Modernisation will reduce complexity in the stamp taxes on shares framework while digitising and enabling faster processing of Stamp Duty transactions, resulting in improved efficiency and a framework fit for the modern business world.

VAT online marketplace liability

VAT compliance on sales of goods from overseas sellers improved significantly following reforms in 2021 which require online marketplaces to account for VAT in certain circumstances. However, some compliance challenges remain, and the government will therefore explore, including through engagement with stakeholders, the merits and value of further reform to these rules.

For stakeholders who wish to register their interest in engaging with the government on this issue, please email onlinemarketplaceliability@hmtreasury.gov.uk

Reducing outbound post

The government is committed to modernising HMRC to become a digital first organisation. The government is announcing today that HMRC will reduce paper post sent, saving £50 million per year by 2028-29, whilst maintaining paper post provision for critical correspondence and for the digitally excluded. The government will do this by investing in digital services to send and receive taxpayer information and will bring forward legislation to support a digital first approach.

Reducing HMRC’s central London estate

The government is committed to improving value for money in the system of tax administration, and so will be reducing the HMRC estate in central London by 25%. HMRC is already a national organisation and by 2030, 85% of HMRC staff will be based outside of London. Moving roles out of London in line with the government’s wider Places for Growth initiative will ensure that the civil service is closer to the communities that they serve.

Valuation Office Agency

Ahead of its review of all arm’s-length bodies, the government is confirming it will bring the functions of the Valuation Office Agency, an Executive Agency of HMRC, within HMRC, by the end of this financial year.