Tax news in brief

Statutory payments recovery rate for employers

HMRC has published details of the rates and thresholds that employers should use for 2025/26 when they operate their payroll or provide expenses and benefits to their employees. For a summary of key changes taking effect from 6 April 2025, see ICAEW’s article Five payroll changes to look out for.

Employers who have paid certain statutory payments (not statutory sick pay) to employees can normally recover 92% from HMRC. A business that has paid £45,000 or less in class 1 national insurance in the last complete tax year may be able to reclaim 100% of some statutory payments paid to employees, plus an additional amount as compensation. The compensatory amount is currently 3%. HMRC’s rates and thresholds publication confirms that this will increase to 108.5% for 2025/26.

Expanding tax conditionality to new sectors

ICAEW has responded to HMRC’s consultation on expanding the existing tax conditionality checks to licences in the waste, animal welfare and transport sectors across the UK. ICAEW has not given answers to the specific questions raised in the consultation document as its membership base in those sectors is limited. However, ICAEW does state that, as a point of principle, any extension should only take place if a positive effect on reducing error, fraud and evasion can be anticipated from available data. For guidance on the current rules, see gov.uk.

New Pillar Two guidance

HMRC has published supplementary draft guidance on multinational top-up tax and domestic top-up tax for consultation. It includes sections on flow-through entities, joint ventures, the insurance sector, additional top-up amounts, the undertaxed profits rule and certain other provisions that have been amended or introduced in the Finance Bill 2024-25.

Trader goods profile launched

HMRC has launched the trader goods profile (TGP) to ease the movement of goods from Great Britain to Northern Ireland. This new service is part of the UK internal market scheme (UKIMS), which allows businesses to move goods under simplified processes. Goods classified as 'not at risk' of moving to the EU can benefit from reduced customs requirements, avoiding full customs declarations.

The TGP holds records for goods moved between Great Britain and Northern Ireland, including essential details like goods description, commodity code, and country of origin. This information helps to auto-populate the internal market movement information, a simplified dataset available to those registered for UKIMS, that replaces the need for full customs declarations for 'not at risk' goods. Businesses can manage their goods records, update previous movements, and seek HMRC advice on product classifications through the TGP.

Deposit return scheme

Regulations have been made that establish a deposit return (DRS) scheme for drinks containers in England and Northern Ireland. The government says that: “Once the scheme launches in October 2027, consumers will have a financial incentive to return empty containers to a collection point, such as at their local supermarket, so that the bottle or can will be recycled.”

The Scottish government says that it is also committed to introducing a DRS. It is “working closely with the UK government and Northern Ireland Executive to ensure the successful rollout of the scheme across Scotland, England, and Northern Ireland in October 2027.”

The scheme administrator, also known as a deposit management organisation, for England and Northern Ireland is due to be appointed in April 2025.

International tax round-up

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

• the United States’ stance on the organisation for economic cooperation and development’s (OECD’s) global tax deal and the European Union’s (EU’s) tax policies following President Trump’s inauguration;
• a plan to enhance European competitiveness, which includes unifying corporate law, taxation and labour regulations across the EU; and
• the next CFE forum, which will take place in Brussels on 27 March 2025. The topic will be: Navigating tax transformation - from compliance to competitiveness.