Tax news in brief

Changes to HMRC interest rates 

HMRC has updated its interest rates for late and early payments of tax to reflect the recent cut in the Bank of England (BOE) base rate.  

The changes take effect from 17 February 2025 for corporation tax quarterly instalment payments (QIPs) and from 25 February 2025 for other tax payments, as follows: 

• underpaid QIPs: 5.5% (was 5.75%);
• overpaid QIPs: 4.25% (was 4.5%);
• underpaid tax payments other than QIPs: 7% (was 7.25%); and
• overpaid tax payments other than QIPs: 3.5% (was 3.75%). 

The change in the BOE base rate is also reflected in the rates for save as you earn share option schemes. 

For further information, see this article published by ICAEW at the time of the last BOE base rate cut. This includes reference to changes to the rates for underpaid tax taking effect from 6 April 2025.  

New HMRC help cards for employers 

HMRC has published the following help cards: 

• Providing your employer and HMRC with accurate personal information – get the right pay faster
• How to support your new employees to get the right pay faster – collecting personal details
• Employer help card: How to support your new employees to get the right pay faster – understanding the starter declaration form
• Employer help card: New starter information – helping employers get it right 

HMRC says that the help cards explain the information employers need “to speed up the onboarding process and get their new starters on the correct pay”. 

Changes to land transaction tax 

Land transaction tax (LTT) is a tax on the purchase or lease of land and buildings in Wales. Delivering on a commitment made in December 2024, the Welsh government has enacted legislation to ensure that claims for multiple dwellings relief are not allowed where the subsidiary dwelling exemption is applied.  

The legislation came into force on 7 February 2025. However, it does not affect land transactions effected in pursuance of a contract entered into or substantially performed before that date, subject to meeting certain conditions. 

Delay in issuing P800s and PA302s 

In December 2024, HMRC announced delays in issuing tax calculation (P800) and simple assessment (PA302) letters due to “higher-than-expected volumes”.  

HMRC would normally expect to complete the pay as you earn (PAYE) reconciliation process by the end of November after the end of the tax year. However, this is taking longer for 2023/24 with completion expected by the end of March 2025. HMRC has asked taxpayers who are expecting a P800 or PA302 for 2023/24 and have not yet received one, to wait until April 2025 before contacting HMRC. Once calculations are received they should be checked very carefully. 

For further information about P800s and PA302s, see HMRC’s guidance, Tax overpayments and underpayments: If you’ve not paid the right amount of tax. 

East Midlands investment zone 

Regulations have been made which designate areas as special tax sites within the East Midlands investment zone. HMRC has published a map of the zone. Special tax sites in investment zones benefits for tax reliefs, including with regard to stamp duty land tax, national insurance contributions and structures and buildings allowances.  

International tax round-up 

CFE Tax Advisers Europe has published its latest collection of tax top 5 developments. This includes updates on: 

• the United Nation’s (UN’s) framework convention on international tax cooperation. A key focus of the UN’s work is the development of a protocol which addresses the taxation of income derived from cross-border services;
• calls for coordinated national reforms to create a more investment-friendly tax framework across European Union (EU) member states; and
• the EU’s efforts to combat VAT fraud. A new briefing - Filling the gap: the EU’s fight against VAT fraud – estimates that the VAT gap stood at €89 billion in 2022, or about 7% of the total expected VAT revenue.