New head of HMRC
John-Paul (JP) Marks has been appointed as the new permanent secretary and chief executive at HMRC. Marks is currently the permanent secretary for the Scottish Government. He will replace Sir Jim Harra who will step down in April 2025.
The related 51% group companies test
Prior to the introduction of the small profits rate and marginal relief, the related 51% group companies test applied to determine if a company was required to pay its corporation tax liability in quarterly instalments. The associated companies rules replaced the related 51% group companies test with effect from 1 April 2023. Where a company’s accounting period straddles 1 April 2023 (for example, the year ended 31 December 2023), the company must apply the related 51% group companies test across the whole of the period.
On 10 September 2024, HMRC updated its guidance on how to complete the company tax return where a period straddles 1 April 2023, requiring companies to use box 326 (and not box 625) to report the number of related 51% group companies. HMRC has now clarified that returns submitted before 10 September 2024 do not need to be amended to reflect the updated guidance.
Student loan figures for 2025/26
As reported by HMRC in agent update 126, the government has announced the student and postgraduate loan thresholds applying from 6 April 2025, as follows:
- plan 1: £26,065;
- plan 2: £28,470;
- plan 4: £32,745; and
- postgraduate loan: £21,000
No changes have been made to the rates of deduction applying to earnings above the relevant threshold. The rates remain at 9% for plans 1, 2 and 4 and 6% for postgraduate loans.
HMRC will update its guidance for employers to reflect the new rates on 6 April 2025.
Issue with the customs declaration service
The customs declaration service (CDS) is currently unable to accept special and diacritic characters. HMRC has asked us to share this guidance which gives examples of special and diacritic characters and explains what to do in certain circumstances, including where the person has an approved licence with characters that cannot be accepted by CDS. HMRC says that this issue should be fixed in spring 2025.
Tax Faculty
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.