The government has unveiled a series of proposals aimed at simplifying and modernising the tax system. We outline the changes that will impact employers.
On 28 April 2025 HMRC issued a package of tax simplification measures including some designed to reduce the burden on employers.
The key announcements from an employer perspective are:
- Payrolling benefits in kind: A 12 month delay
to the introduction of mandatory payrolling for benefits in kind,
which will now take effect from 6 April 2027.
This is a welcome reprieve for many employers, giving them more time to prepare for the change. HMRC has issued a note on some of the operational aspects of payrolling benefits in kind. This includes confirmation that HMRC will retain P11D forms for loans and accommodation for a temporary period, enabling employers to further delay payrolling of these benefits, and may also retain P11D forms for certain internationally mobile employees.
- CEST revisions: Revisions to HMRC's Check Employment Status Tool (CEST).
The revisions are small changes which HMRC think will make it easier for businesses to use CEST. Many businesses use CEST to check if a contractor – whether engaged as a sole trader or via the contractor's personal services company – is a disguised employee. A key advantage of using this tool is that, provided it has been completed properly and in line with HMRC guidance, HMRC is bound by the CEST result. HMRC will update its guidance to take account of these revisions and provide updated examples in due course.
- Paid hours data: Confirmation that HMRC does not intend to go ahead with the proposal to require employers to provide more detailed data on employee paid hours from April 2026.
For details of other simplification measures affecting share incentives see here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
