Issue 136 of Agent Update
Published 16 October 2025
Technical updates and reminders
Developments and changes to legislation and allowances relating to UK tax including:
Tax
- Limited authorisation
- New student loan plan type — Plan 5
- New advisory electric rate for fully electric company cars
- Bank and building society interest
- Capital Gains Tax — work out your adjustment for the 2024 to 2025 tax year
- The new and improved compliance interactive guidance is now live
- Self Assessment student loan repayments and payrolled benefits in kind
Borders and Trade
Making tax Digital
- Getting your clients ready for Making Tax Digital for Income Tax
- Agent support for Making Tax Digital for Income Tax
- Making Tax Digital exemption for digitally excluded customers
HMRC Agent Services
- Get ahead with Self Assessment — go digital and file early
- Improvements to our online form for correcting VAT errors
- Self Assessment re-activation using option 2 of the Agent Dedicated Line
- Help improve HMRC’s digital services — get involved in user research
- UK tax residence — all guidance in one place
- New GOV.UK page to help customers make informed choices when seeking tax representation
- Gift Aid Awareness Day 2025 — a year on from our campaign
Agent engagement
Latest updates from the partnership between HMRC and the main agent representative bodies. Including:
- Expansion of Research and Development (R&D) professional bodies mailbox — now open to all agents
- New Research & Development (R&D) interactive guidance
- Provide feedback on HMRC Manuals
- Address rejections — hints and tips
Tax
Limited authorisation
HMRC no longer accept the ‘64-8 Authorising your agent’ form to request an agent be given limited authorisation to act on behalf of an individual or business.
If a customer wants to authorise an agent to deal with a specific area of their tax but not act as a full tax agent on HMRC’s records, this is called limited authorisation.
An agent with limited authorisation can:
- talk to HMRC and answer any questions on a customer’s behalf
- help a customer to fill in forms
The agent will not have access to the customer’s tax affairs online.
To give an agent limited authorisation to help deal with their tax, customers must write to HMRC at:
National Insurance contributions and Employers Office
HM Revenue and Customs
BX9 1AN
The letter of authority must include:
- customer name and address
- customer tax reference number, for example their Unique Taxpayer Reference (UTR)
- the name and address of the agent they want to authorise
- the customer’s signature
If a customer cannot sign the letter of authority, they will need to contact the relevant department at HMRC or get someone to do it for them.
Guidance on authorising an agent has been updated.
New student loan plan type — Plan 5
HMRC is giving agents advance notice that the Department for Education (DfE) has introduced a new student loan Plan type 5. Repayments are due to begin from 6 April 2026.
Key details of Plan 5 are:
- Plan 5 will be operated and collected in the same way as current plan types 1, 2 and 4
- the earliest repayments will start for PAYE is 6 April 2026
- the earliest repayments will start for Self Assessment is 6 April 2027
- the annual repayment threshold will be £25,000
- repayments will be made at 9% on earnings over the £25,000 threshold
- employers will begin to receive student loan start notices from March 2026 for Plan 5 borrowers due to go into repayment from April 2026
- Plan 5 is for those who applied to Student Finance England and started courses from August 2023 onwards
Software developers are working on payroll updates due to be in place by 6 April 2026.
Guidance and forms on GOV.UK will be updated by 6 April 2026.
Agents are reminded that they can:
- only deduct one plan type at a time — Plan 1, Plan 2, Plan 4 or, from April 2026, Plan 5
- deduct the Postgraduate Loan at the same time as one student loan plan type (Plan 1, Plan 2, Plan 4 or Plan 5)
See general information on student loan and postgraduate loan repayment guidance for employers.
New advisory electric rate for fully electric company cars
Advisory fuel rates (AFR) are designed to simplify administration for employers and company car drivers. Updated quarterly, these rates assist employers in reimbursing employees for fuel costs incurred during business travel in company cars. Employees may also use these rates to repay their employer for the cost of any private fuel usage.
AFR guidance now includes a new advisory electric rate (AER) for fully electric company cars charged at public charging points — slow or fast chargers under 50 kilowatts. If the cost per mile of a public charger exceeds the AER, employers or employees may use a higher rate, provided they can show the cost per mile was higher.
For journeys where a company car is charged at both public and residential locations, you may apportion the mileage to reflect the proportion of charging at each location. Any apportionment should be carried out on a just and reasonable basis.
Bank and building society interest
From October 2025, HMRC will start to issue Simple Assessment letters for any tax owed on bank and building society interest earned between April 2024 and April 2025.
Some customers may have already received a Simple Assessment for the 2024 to 2025 tax year that did not include their bank and building society interest or both.
If HMRC subsequently receives information about interest, these customers may receive a second Simple Assessment letter for the same tax year which takes this into account. When this occurs, you should make your clients aware that the second letter will show the total tax owed for the year. This includes the amount from the first letter, even if it has been paid. To work out what they owe, your clients should deduct anything they have already paid from the amount in the second letter.
How to pay
If your client needs to pay tax on savings interest, their Simple Assessment letter will explain how much they owe and why. Guidance is available on how to pay their tax bill. They can also watch the step-by-step guide YouTube video explaining Simple Assessment.
Why figures may differ
Tax codes and bank statements may show different interest amounts because:
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some interest may be tax-free under Personal Savings Allowance
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only taxable interest shows in tax codes
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HMRC may use estimates based on recent data
Key points for clients
Be aware that:
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banks and building societies tell HMRC about interest paid to customers each year
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most people can earn some interest before paying tax
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they can use HMRC’s online calculator to check how much tax they might pay on interest from savings
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your clients can use their Personal Allowance for tax-free interest if they have not used it on wages, pension or other income
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they may also get a Personal Savings Allowance — up to £1,000 a year in interest without paying tax, depending on their tax band
Further help
Read more information on Simple Assessment. Your clients can also check their personal tax account.
If they think their Simple Assessment is wrong, they must call or write within 60 days from the date of the letter to formally dispute the assessment.
If your clients have already registered for Self Assessment for the relevant year, call HMRC on 0300 200 3300 to withdraw their Simple Assessment.
Capital Gains Tax — work out your adjustment for the 2024 to 2025 tax year
At the Autumn Budget 2024, the government announced changes to the main rates of Capital Gains Tax. If there was a disposal of assets from 30 October 2024, the Self Assessment tax return will not automatically calculate the tax due at the new main rates for the 2024 to 2025 tax year.
This means you need to take additional steps for individuals, trustees and personal representatives to ensure the correct Capital Gains Tax is calculated and paid. To do this, use the online calculator to work out the adjustment for your client’s tax return for disposals of assets from 30 October 2024 when the rates changed.
You will then need to record the adjustments in the adjustment boxes for individuals, trustees and personal representatives:
- SA108 — Individuals Capital gains summary page
- SA905 — Trust and Estates Capital gains
- SA970 — Tax Return for Trustees of Registered Pension Schemes
If you use commercial software to submit your client’s tax return, you need to check the correct rates are used.
Changes to the rates of Capital Gains Tax for 2024 to 2025 exclude the following:
- residential property
- Business Asset Disposal Relief
- Investors Relief
- carried interest
The new and improved compliance interactive guidance is now live
In April we launched HMRC’s new compliance interactive guidance to help businesses and individuals understand HMRC compliance checks — supporting the government’s Plan for Change to deliver economic growth.
We have now launched a new and improved version featuring a variety of improvements. Customers will enjoy a more tailored experience, so they only see guidance that’s relevant to their needs, and educational materials to help them take better control of their money and tax. We have also made improvements to make it more user-friendly.
The compliance tool brings guidance and educational materials into a single place, making it easier to find what they need and enabling them to navigate more easily to the appropriate information such as:
- HMRC compliance checks
- why HMRC has requested specific information or documents
- how to request extra support due to health or personal circumstances
- how to appoint someone to act on your behalf
- what to do if you disagree with a decision made by HMRC
- how to pay a tax assessment or penalty
The tool and associated material is free to use and available directly from GOV.UK and is for information purposes only.
Users will not be registered for any taxes if they use the tool and HMRC will not collect or store any information about the user.
HMRC keeps all its guidance under review. Feedback from businesses and key stakeholders is considered to improve customers’ understanding and experience when navigating online guidance.
You can read more in our previous HMRC Press release on mynewsdesk.com.
Self Assessment student loan repayments and payrolled benefits in kind
As previously highlighted in the Agent Update Issue 129, a new box has been added to the 2024 to 2025 Self Assessment tax return for student and postgraduate loan purposes. This box is specifically for reporting payrolled benefits in kind that are subject to Class 1A National Insurance contributions only.
This update affects clients who are:
- within Self Assessment
- repaying a student loan, postgraduate loan, or both
- receiving payrolled benefits in kind that are subject to Class 1A National Insurance contributions through their employer
It is important to note that student and postgraduate loan repayments are not due on payrolled benefits in kind that are taxed through payroll and are subject to Class 1A National Insurance contributions only.
The new box allows these payrolled benefits in kind to be reported separately from total Pay as You Earn income on the Self Assessment tax return, helping ensure the correct loan repayment amount is calculated.
Actions to take for the 2024 to 2025 tax return
As a reminder, to make sure your client pays the right amount of student or postgraduate loan repayment, you should report the payrolled benefits in kind subject to Class 1A National Insurance contributions amount in the correct boxes of the Self Assessment return.
Depending on the return completed, use these boxes to report these payrolled benefits in kind:
- online tax return — box titled Payrolled benefits included in pay from employer which affect your student loan repayments
- SA102 paper tax return — box titled Payrolled benefits included in box 1 which affect your student loan repayments
Read more information about completing Self Assessment tax returns.
Borders and Trade
Be ready to use ICS2 for goods movements from Great Britain to Northern Ireland — by 31 December 2025
Last month, we confirmed that you and your customers must ensure you are ready to use Import Control System 2 (ICS2) as soon as possible and no later than 31 December 2025.
You can submit Entry Summary (ENS) declarations through Import Control System Northern Ireland (ICSNI) until 31 December 2025. However, you should continue to work with your supply chain to make sure you are ready for 31 December 2025 when ICS2 becomes mandatory.
You do not need to make ENS declarations for parcels moving to and from consumers (such as private individuals) in Northern Ireland.
Register to use the Import Control System 2 for more information.
Moving goods and sending and receiving goods under ICS2
Read Agent Update: issue 135 for more information about:
- physically moving goods from Great Britain (England, Scotland and Wales) to Northern Ireland
- sending or receiving goods moving from Great Britain to Northern Ireland
- sending or receiving goods moving from Great Britain to the EU
Further information and support
More information is available:
- ICS2 for movements into Northern Ireland — Make an entry summary declaration using the Import Control System 2
- ICS2 for movements into the EU — Import Control System 2, on the European Union website
- sign up for the Trader Support Service
Contact HMRC by email at nistakeholderengagementteam@hmrc.gov.uk for further queries.
Making Tax Digital
Getting your clients ready for Making Tax Digital for Income Tax
From November 2025, customers who have submitted their 2024 to 2025 tax return will start receiving letters from HMRC making them aware of Making Tax Digital (MTD) for Income Tax. As a result, you may receive increased contact from your clients about this.
These awareness letters will:
- inform customers that, based on the information they have submitted, they will need to use MTD for Income Tax from April 2026
- inform customers of what they need to do to get ready
- include a QR code linking them to GOV.UK guidance
The letters will also advise customers to contact their tax agent to discuss what they need to do. To help you prepare, you should start reviewing your current clients tax affairs and sign up those who will need to use MTD for Income Tax from April 2026.
Get ready for MTD step by step
You can find out more information about MTD for Income Tax and what you need to do to get ready by following the MTD agent step by step guide and our agent toolkit. We also have communications resources on the Frontify website you can share with your clients.
Agent support for Making Tax Digital for Income Tax
Agents now have access to tailored support to help you and your clients prepare for MTD for Income Tax.
Our MTD Agent Engagement team is running interactive group sessions on Microsoft Teams to provide guidance and support. These sessions will give you direct access to HMRC specialists in an interactive environment where you can discuss what’s changing and get their questions answered in real time.
You can register your interest through a simple online form using your agent services account (ASA). You will need to sign in with your Government Gateway user ID and password linked to your ASA to access the form.
If you still do not have an ASA, you can access the form by signing in with your online services for agents account. In this case, you will need to enter your contact details manually.
When completing the form, you will be asked to:
- give permission to be contacted by HMRC by email
- indicate how many clients you expect to sign up for MTD for Income Tax (including those for testing)
- express an interest in the type of support you need
Once you have completed the form, the MTD Agent Engagement team will be in touch with relevant support options, including instructions for joining an interactive session.
Making Tax Digital exemption for digitally excluded customers
As an agent, some of your clients may qualify for an exemption from MTD for Income Tax because they are digitally excluded. Your client may be digitally excluded if it is not reasonable for them to use MTD for Income Tax compatible software to keep digital records or submit them to HMRC.
There are different reasons why this may apply to your clients and HMRC will consider all applications on a case-by-case basis, such as:
- their age, health condition or disability stops them from using a computer, tablet or smartphone to keep digital records or submit them to HMRC
- they are a practising member of a religious society or order whose beliefs are incompatible with using digital communications or keeping digital records, and they do not use a computer, tablet or smartphone for business and personal use
- they cannot get internet access at their home or business because of their location, and cannot get access at a suitable alternative location
If you think your client is digitally excluded (and you will not meet the requirements on their behalf) you can apply for an exemption from MTD for Income Tax for them. HMRC will aim to process your application within 28 days of receiving it. It may take longer if you do not give us all the information we need when you apply.
You should still prepare your clients to use MTD for Income Tax while you are waiting for HMRC to respond, in case their application is not accepted.
If you have previously signed up your clients for MTD for Income Tax and think they should have been considered digitally excluded because their circumstances have changed, you should apply for an exemption now.
VAT exemptions
If your client was previously confirmed as exempt from sending VAT returns using Making Tax Digital compatible software because they are digitally excluded, you should contact us to confirm their status for MTD for Income Tax.
You can find out how to get an exemption for MTD for income tax, who to contact and what you will need to tell us.
HMRC Agent Services
Get ahead with Self Assessment — go digital and file early
The 2024 to 2025 Self Assessment tax season is well underway. Now is the perfect time to help your clients and your practice stay ahead.
Filing early and using HMRC’s digital services can make the process smoother, reduce stress, and gives everyone more time to plan. It also helps avoid last-minute errors.
Digital Tools to make filing easier
These HMRC’s online services save time:
- Self Assessment for agents — submit tax returns, view tax liabilities and payments, download your client list
- Income Record Viewer — access PAYE information for the current and previous 4 tax years, taxable benefits and details of underpaid tax
- Agent Services Account — manage authorisations and access services, including MTD for Income Tax
Agents are leading the way
Between April and August 2025, 1.6 million Self Assessment tax returns were filed by agents. Encourage your clients to provide the information you need to file their tax return now and join the thousands of agents who have got ahead of the deadline.
Improvements to our online form for correcting VAT errors
We have enhanced our online form for correcting VAT errors.
Authorised agents who want to make a correction to their VAT return (an error correction notification) on behalf of their client can now upload additional documents in a range of formats and benefit from increased space for free text (up to 2,000 characters) to support their error disclosure.
The online form has co-existed with the print and post process (VAT652) for many years. Form VAT652 was withdrawn from 5 September 2025, leaving the online form as the quickest way of correcting VAT errors.
Read more on how to report errors, including access to the online form.
Self Assessment re-activation using option 2 of the Agent Dedicated Line
We are introducing a new option exclusively for agents to help with the process of re-activating clients Self Assessment accounts.
From 1 October 2025, agents needing to re-activate a client’s Self Assessment account will be able do so by calling the Agent Dedicated Line (ADL).
The service will be available by selecting option 2 (Self Assessment or PAYE for individuals’ enquiries) from the ADL menu. Callers will then be given an option to be routed to a team of dedicated advisors, who in line with existing ADL procedures, will be able to discuss a maximum of five client accounts per call.
This option is available for re-activations only, any first-time client registrations will be required to follow the existing process. Re-activations cannot be requested using web chat.
Advisers will not be able to transfer customers to this service from other helplines.
Agents will also still be able to re-activate a Self Assessment account for a client by completing an online SA1 or CWF1 form.
Help improve HMRC’s digital services — get involved in user research
In Agent Update Issue 133, we informed you that we are looking to build a pool of agents we can invite to take part in user research to help shape the future of HMRC’s digital services.
We would like to hear from you, and if you are interested in helping, register with us to take part in the research.
Once registered we will reach out to you to obtain further information to make sure that any research activities we invite you to take part in, are relevant to you.
The survey is quick to complete and helps ensure we are gathering a wide range of voices.
By sharing your experiences, you will help us create a better and more inclusive services for agents everywhere.
UK tax residence — all guidance in one place
To help your clients navigate their UK tax obligations we have created a new collection page for residence guidance to bring together existing guidance into one location.
Our guidance has not changed — we have just made it even easier for customers to find the information they need by creating a new section on GOV.UK dedicated to this topic.
The page, developed directly from stakeholder feedback, includes guidance on changes to non-UK domiciled individuals from 6 April 2025 for:
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long-term UK residents (former ‘non-domiciled’ individuals)
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qualifying new UK residents
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employers
If needed, your clients can use this guidance to support their Self Assessment submission for 2025 to 2026. The form will be available from April 2026, with a deadline of 31 January 2027.
For tax years 2024 to 2025 and earlier, you can file your clients’ Self Assessment tax return as an authorised agent in the normal way.
New GOV.UK page to help customers make informed choices when seeking tax representation
HMRC has published a new page on understanding tax advisers and recognising potentially harmful practices which aims to help customers understand the role of intermediaries in the tax system and identify potentially harmful practices. HMRC recognises that most intermediaries provide valuable services to taxpayers and support tax administration.
The new GOV.UK page consolidates existing resources to help taxpayers:
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understand how to make informed choices about representation
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recognise signs of potential exploitation by bad actors
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know how to report concerns about intermediary behaviour
HMRC acknowledges the important role professional tax advisers play in the tax system, while helping taxpayers identify concerning practices such as requests to share HMRC login details, misleading claims of being “HMRC approved”, or inappropriate use of HMRC branding.
This publication supports our commitment to maintaining high standards in tax representation and preventing and addressing potentially harmful practices.
Gift Aid Awareness Day 2025 — a year on from our campaign
We celebrated Gift Aid Awareness Day on 9 October with the campaign ‘#TickTheBox’.
Gift Aid allows charities and community amateur sports clubs (CASCs) to claim an extra 25 pence for every £1 donated.
For the tax year to April 2025 tax reliefs for charities and their donors totalled around £6.7 billion, including £1.7 billion in Gift Aid paid directly to charities. However, around £560 million of Gift Aid eligible to charities goes unclaimed every year.
HMRC continues its collaborative work with industry partners to enhance the Gift Aid service for all users. We continue to review current Gift Aid claiming processes, including improved communication and guidance, to help charities better understand their eligibility for tax relief and reduce the amount of unclaimed Gift Aid that could be supporting vital charitable work across the UK.
Agent Engagement
Expansion of Research and Development (R&D) professional bodies mailbox — now open to all agents
Originally launched in May 2024, the R&D professional bodies mailbox was created as a dedicated channel for members of professional bodies to contact HMRC to report concerns about standards in R&D claims.
Following feedback from external stakeholders, HMRC has now expanded access to this mailbox. All agents can now use it to report concerns about poor standards by other agents advising on R&D claims. This includes raising issues about other agents who may be:
- providing misleading information to clients
- demonstrating poor technical knowledge
- engaging in potentially dishonest behaviour
Read more information on reporting poor R&D tax relief service standards and access to the mailbox.
New Research and Development (R&D) interactive guidance
The R&D interactive guidance has been launched to assist R&D customers with decision making when considering making a claim for R&D tax relief.
Use this tool to check if a project includes activities that qualify as R&D for tax purposes.
The tool aims to support businesses and signposts relevant guidance and support.
The tool gives HMRC’s view on whether a project involves R&D for tax purposes based on the information provided. The tool needs to be completed accurately based on the facts of each project.
A competent professional must answer some of the questions in the tool.
It is not mandatory to use the tool, however the aim is to support those businesses who may be considering making an R&D tax relief claim.
Provide feedback on HMRC Manuals
We recognise the important role that tax professionals play in helping taxpayers navigate the tax system, comply with their obligations, and receive their entitlements.
If you use our manuals, you can help by leaving feedback. During 2024 to 2025 we received 1,985 items of feedback and 56% of these led to guidance improvements, proof that sending feedback really does make a difference. There are a variety of ways in which you can provide feedback.
Let us know if a page was useful
You can quickly let us know if the content of a page was helpful by selecting either ‘Yes’ or ‘No’ to the question ‘Is this page useful?’. The question is situated after the main content of any manual page, and you can answer anonymously. Doing this helps HMRC to understand whether the guidance is working as intended and what needs their attention. If you choose to answer ‘No’ you also get the option to complete a survey to tell us more about the issue.
Report anything from a typo or a broken link, to missing or incorrect information
You can use the ‘Report a problem with this page’ button, following the main content of the page, to tell us what you were trying to do on the page and what issues you encountered. Despite the feedback being anonymous, we review every item and work with manual owners in HMRC to make changes required to resolve feedback.
Provide feedback and get a reply if you want one
You can use the ‘Contact’ link, then the link to the GOV.UK contact form to provide feedback where you want a reply and leave your contact details.
Address rejections — hints and tips
Agents are further reminded of our hints and tips article in Issue 128 of Agent Update.
It details some of the ways in which agents can help reduce the number of rejections, particularly in ensuring that the address from the Royal Mail Postcode Finder is used in the client’s personal tax account, and that this matches any subsequent Self Assessment repayment claims.
Contact Information for professional and representative bodies
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AAT: wt@aat.org.uk
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ACCA Jason Piper: jason.piper@accaglobal.com
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AIA David Potts: workingtogether@aiaworldwide.com
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CIOT Technical: technical@ciot.org.uk
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CIPP Lora Murphy: Lora.Murphy@cipp.org.uk
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CPAA Alison Hale: ahale@cpaa.co.uk
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ICAEW Tax Faculty: taxfac@icaew.com
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ICAS Tax Team: tax@icas.com
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ICB Steven Worrall: steven@swaccountants.co.uk
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ICPA: admin@icpa.org.uk
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VATPG Ruth Corkin: Ruth.corkin@hhlp.co.uk