Guidance

December 2025 issue of the Employer Bulletin

Published 10 December 2025

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Introduction     

On 26 November 2025, the Chancellor of the Exchequer, Rt Hon Rachel Reeves MP, gave her Budget 2025 speech and set out the government’s plans to strengthen foundations for a secure future.   

HMRC will supply further information and guidance over the coming months to support you through the changes.  

Several upcoming consultations were announced. These can be found on the consultations page. You can provide feedback once they open.

In this month’s edition of the Employer Bulletin there are important updates and information on:     

PAYE 

Tax updates and changes to guidance 

General information and customer support  

HMRCs support for customers who need extra help 

HMRCs principles of support for customers who need extra help set out our commitment to support customers according to their needs and underpin the HMRC Charter. 

Find out how to get help and the extra support available.     

PAYE 

Student and postgraduate loans thresholds and rates for 2026 to 2027 

The new student loan plan type and postgraduate loan thresholds and rates have been announced by the Department for Education. The thresholds from 6 April 2026 are: 

  • Plan 1 - £26,900 

  • Plan 2 - £29,385

  • Plan 4 - £33,795 

  • Plan 5 - £25,000 

  • postgraduate loan - £21,000

Deductions rates from 6 April 2026 for: 

  • Plan type 1, 2, 4 and 5 remain at 9% for any earnings above the respective thresholds 

  • postgraduate loan remains at 6% for any earnings above the threshold 

Changes to the student loan Starter Checklist and Expat version

We are now updating the Starter checklist ahead of the new tax year for 6 April 2026 to add new student plan type 5 and to clarify options for customers with multiple loan types.

Key changes are:

  • a new Plan type 5 checkbox added to the PDF and online version
  • employees will now only be able to select one plan type plan 1 or 2 or 4 or 5 on the online version, however they can still select Postgraduate loan at the same time as plan type loans

Additional guidance has been added in the forms to support customers with multiple loans and to help employees identify their repayment loan type.

You can read how we informed employers with more details about the new student loan plan 5 in the October Employer Bulletin.

Student loan and postgraduate loan repayment guidance for employers will be updated on 6 April 2026. 

Changes take effect 6 April 2026 — prepare for new PAYE responsibilities in labour supply chains 

From 6 April 2026, significant changes to PAYE responsibilities will come into effect for labour supply chains, that include umbrella companies. If you are an agency or end client, the rules mean that you are responsible for making sure PAYE is operated correctly when an umbrella company employs your workers. If we find an umbrella company has not paid the correct amount of PAYE to us, we may recover it from you. 

To help you prepare, we have published guidance on these changes to umbrella company rules and updated the Employment Status Manual. This provides details on how the changes will tackle non-compliance in the umbrella company market, and what this means for businesses. 

Early preparation is essential; get ready ahead of April 2026 by: 

Reminder — employees can find their National Insurance number online 

Employees can use HMRC’s online service to find their National Insurance number. They can either: 

  • view it in their online account 

  • download it to their digital wallet 

  • request a letter 

Keep your PAYE Settlement Agreement details up to date 

HMRC have noticed a recent increase in incorrect customer details. It is important that we have your current company name and address on file. 

If your details are out of date, it could cause delays or result in important letters being sent to the wrong address. 

How to update your details 

You can update your company name or address with HMRC by either calling us on 0300 200 3200, or, writing to us at 

PAYE Settlement Agreements 

HM Revenue and Customs 

BX9 2AN 

Further information 

To learn more about PAYE Settlement Agreements (PSA) and how they work, you can watch our helpful online videos on: 

Penalties for late submission of P11D and P11D(b) 

HMRC has issued the first penalties to employers who have failed to comply with deadlines for submissions of P11D and P11D(b) for the tax year ending 5 April 2025. You must submit all outstanding forms to avoid future penalties. All P11D and P11D(b) submissions for the 2024 to 2025 tax year were due by 6 July 2025. 

You can submit any outstanding forms online using either: 

You must send in a P11D(b) if you payrolled your 2024 to 2025 benefits to declare Class 1A National Insurance contributions due. Further details on the deadline for employer expenses and benefits are available.

If you have not provided any expenses or benefits in the 2024 to 2025 tax year, you only need to declare a no return if you have been notified to do so by HMRC. 

If you have made a mistake, you need to complete an online expenses and benefits P11D or P11D(b) amendment form. This is a requirement for all amendments to incorrect submissions. 

Clarifying the Optional Remuneration Arrangement rules at section 228A ITEPA 

HMRC are aware of third-party scheme providers advertising salary sacrifice schemes, such as grocery vouchers, which incorrectly claim they can make savings on employer National Insurance Contributions, with HMRC approval. HMRC does not approve businesses to advertise their schemes as tax compliant.  

While a third-party provider may present a scheme as tax-efficient, ultimate responsibility for tax and National Insurance Contributions rests with the employer. Therefore, employers must independently verify scheme compliance with regulations. 

The optional remuneration arrangement (OpRA) rules, introduced in April 2017, largely removed the tax and National Insurance Contributions advantages for benefits provided through salary sacrifice arrangements. 

This was to address the use of these arrangements where employees agree to give up a portion of their earnings for a benefit, resulting in lower income tax and National Insurance Contributions compared to receiving the full amount in cash. 

Section 62 ITEPA explains a benefit is provided under OpRA if an employee gives up current or future taxable earnings for a benefit, or enters any agreement to receive a benefit instead of earnings. Usually by way of vouchers or non-cash vouchers, earnings are based on the higher of the voucher’s value or cost and the salary sacrificed. 

Further guidance on OpRA including general exclusion from exemptions is available. 

National Insurance Contributions implications 

Non-cash vouchers provided through salary sacrifice, where the employer facilitates provision, must vary employment terms and conditions, are treated as earnings under National Insurance Contributions legislation and attract Class 1 National Insurance Contributions. Arrangements not meeting specific exemption requirements in Schedule 3 of the Social Security Contributions Regulations 2001, will be subject to Class 1 National Insurance Contributions for both employer and employee. 

Further support is available by contacting the Employer Helpline.

Tax updates and changes to guidance 

Important update regarding tax refunds 

You or your employees may have recently received a letter or text message from HMRC informing you that you are due a tax refund. It is important to note that refunds are no longer issued automatically, so you will need to take an action to be able to receive your money. 

The quickest and easiest way to claim your refund, or to check if you are due one, is through the HMRC app. Here is how you can do it: 

 1. Open the app and navigate to the ‘Pay As You Earn (PAYE)’ section. 

 2. If you are due a refund, you will see a green ‘Claim’ button showing the amount owed. 

 3. Tap the button to start your claim, and your refund will be paid directly into your bank account within one week. 

If you have not signed up for HMRC’s online services, you can still claim your P800 refund online at tax overpayments and underpayments ‘You will need your P800 reference number from your Tax Calculation letter and your National Insurance number. 

HMRC will no longer automatically send a cheque after 21 days. You and your employees must take action to receive any refunds due. 

Payrolling of benefits in kind 

HMRC has issued updated information to support employers’ preparation for future changes to reporting benefits in kind (BiKs). The draft guidance and legislation to help customers prepare for reporting benefits in kind in real-time were published on 26 November 2025, building on the previous April release.

The government announced in April 2025 that mandatory payrolling of BiKs and taxable employment expenses would come into effect from April 2027, rather than April 2026. This is to give additional time for employers, payroll professionals, software providers, tax agents and others to prepare.  

Since April 2025 we have been working on providing more detailed interim guidance to help employers prepare for the changes to reporting benefits in kind from April 2027. This draft guidance and legislation to help customers prepare for reporting benefits in kind in real-time:

  • explains what employers need to think about when preparing their employees and their payroll functions for real-time reporting from April 2027 

  • includes worked examples of how the taxable values of specific BiKs can be calculated 

  • includes draft legislation to aid understanding of the changes to reporting BiKs to HMRC from April 2027 

  • confirms that a registration service for the voluntary payrolling of employer provided loans and accommodation, the most complex of BiKs to report, will be launched from November 2026 

HMRC encourages employers to review the latest interim guidance which explains what you need to understand and do to prepare for the upcoming changes, such as making a list of all benefits in kind you provide and usually report to HMRC using the P11D form. 

Ensure that your payroll software and processes are capable of real-time reporting of BiKs and comply with HMRC’s requirements. You should inform your HR and payroll teams about the changes and make sure they receive appropriate training about processing and reporting BiKs, based on the published interim guidance and any updates. 

Additionally, to assist software providers, HMRC sent technical documentation to software developers in November 2025 that detailed planned changes to Real Time Information (RTI). 

Final guidance will be published ahead of mandatory payrolling of BiKs coming into effect in April 2027. 

Salary Sacrifice reform for pension contributions 

At Budget 2025 the government announced that from April 2029 an employer and employee National Insurance contributions charge will be applied on employer pension contributions made by salary sacrifice above a threshold of £2,000 per annum. Pension contributions made by salary sacrifice will remain exempt from Income Tax. Further information on what this means for employers and employees is available. 

Employers will need to report the total amount sacrificed through their existing payroll software. HMRC will engage with stakeholders on the operation of this cap, and guidance will be published at a later date. 

Investment Zone special tax sites in Wales   

On 21 November 2025, three special tax sites were designated for the Welsh Investment Zone in Wrexham and Flintshire. This designation supports locally led interventions to drive business growth and attract new investment in the region.  

Investment Zones, known as Enhanced Investment Zone in Northern Ireland, are part of the UK’s Modern Industrial Strategy 2025 aiming to promote investment in sectors vital to economic growth. They also aim to create skilled jobs.   

The tax sites offer targeted tax relief incentives, including: 

  • enhanced structures and buildings allowance 

  • enhanced capital allowance 

  • employer National Insurance contributions relief 

  • Land Transaction Tax 

  • full business rates relief or non-domestic rates relief  

Find out more about Investment Zones and their special tax sites across the UK.  

Special tax sites in England were designated in the North East, West Midlands, Liverpool City Region and East Midlands.  

Proposals for Investment Zones in Scotland and for an Enhanced Investment Zone in Northern Ireland will be provided in due course.  

General information and customer support 

Help your contractors steer clear of tax avoidance 

If you have contractors working for you through umbrella companies, we would encourage you to share HMRC’s ‘don’t get caught out’ campaign with them. This will help your workers steer clear of tax avoidance.  

Our campaign provides online guides that explain how to spot tax avoidance. With interactive tools to check payslips and contracts to confirm the right amount of tax is being paid. Doing this avoids getting any unexpected tax bills later.  

Personal stories of people who have been caught up in tax avoidance can be viewed through the ‘don’t get caught out’ campaign page. There is also a You Tube video explaining how umbrella companies work. 

Support is available to contractors who need to leave and report a tax avoidance scheme. Helping them to get back on track and settle their tax affairs quickly to prevent bigger tax bills.  

HMRC never approves tax avoidance schemes, no matter what some promoters claim. We publish a list of named tax avoidance schemes and their promoters. But it is important to note that this is not an exhaustive list.  

Equip your workers with the knowledge they need to make informed and compliant decisions by using our ready to go campaign resources in your newsletters, websites and social media channels. As well as sharing and liking our posts on Facebook, LinkedIn, X.

Every share helps spread the message to protect more people from bad tax advice 

Employment Rights Bill Autumn consultations 

The Plan to Make Work Pay aims to modernise our employment rights legislation, extending the employment protections already given by the best British companies to millions more workers across the country. On 1 July 2025, the government published the Employment Rights Bill Implementation Roadmap. As set out in the roadmap, the government is taking a phased approach to engagement and consultation on these reforms — ensuring that employers have the time and space to work through the detail of each measure and to help us implement them. 

On 23 October 2025, the government published four consultations: 

The Department of Business and Trade will take a phased approach to consultations. These, along with further consultations planned for 2025 and early 2026 will help shape the legislation, supporting government to deliver reforms that are both effective and inclusive. 

Advance funding for statutory maternity, paternity, adoption or shared parental pay

Over the coming weeks, we will be updating some of the links and options on GOV.UK relating to applications for advance funding for maternity, paternity, adoption or shared parental pay. This is part of a gradual process of modernising our systems and will only affect a small number of digital pathways. Some users may notice minor changes to some of the options available, but most will not notice any difference.

From mid-December 2025, all users of the service will be asked to provide an email address, and agree to be contacted if we need more information about a claim. Customers will have the option to decline this and to continue corresponding with us by letter.

Cyber Action Toolkit 

Recent figures show that 42% of small businesses reported cyber breaches in 2024, evidencing the importance for businesses to build their cyber resilience. The National Cyber Security Centre (NCSC) has recently launched the Cyber Action Toolkit. This is an interactive tool designed to help sole traders and small businesses to strengthen their cyber defences. It has been developed to be easy to use and provides simple steps for businesses, with advice tailored to business size and needs. 

Tell ABAB survey report — now live 

The Admin Burdens Advisory Board (ABAB) is an independent body representing small business. ABAB challenges HMRC on its performance, from a small business perspective, providing robust scrutiny against key initiatives, such as Making Tax Digital and improving customer experience. 

ABAB are passionate about listening to and understanding the needs of the small business community. Board members come from a range of businesses and professions, and their goal is to support HMRC to make the tax system quicker and simpler for small businesses. 

One of the key ways ABAB gather small business insight is through the “Tell ABAB Survey” which is conducted annually. The Tell ABAB report 2024 to 2025 was published on 31 October 2025.  

This report gives a commentary around survey findings and provides crucial insight on the big issues faced by small businesses, including those who identify as tax agents, in the tax system. 

If you have any questions about the Tell ABAB Report, email advisoryboard.adminburden@hmrc.gov.uk.

Construction Industry Scheme repayment delays 

HMRC are aware of backlogs in processing Construction Industry Scheme (CIS) tax repayment claims submitted by limited companies, or their agents. These claims are subject to manual checks to ensure accuracy and protect both customers and public funds from fraud and error.  

Due to a combination of factors, some repayments are currently taking longer than expected.  

HMRC understand the impact this can have on businesses and are sorry for any inconvenience caused.  

HMRC are actively deploying additional resource and refining processes to improve turnaround times.  This includes increasing staffing across telephony, post, and casework. 

For further information you can check when you can expect a reply from HMRC.

Claim Child Benefit on the HMRC app or online 

There is no limit to how many children you can claim Child Benefit for.  It is worth £1,355 a year for your first child and £897 a year for any and every additional child.  

Do not miss out, download the HMRC app  to apply for Child Benefit.  

Join nearly 6 million HMRC app users who are already ‘on it’   

Downloading the HMRC app is the quick and easy way to:  

  • see your State Pension forecast  

  • view your National Insurance contributions and any gaps  

  • check your tax code and National Insurance number  

Sign up for a Help to Save account if you receive Universal Credit to get an extra 50p for every £1 you save  

From April 2026, customers using HMRC’s app and online services will also start to gradually get notifications, reminders, and updates digitally rather than by post.

HTML format of Employer Bulletin 

Since September 2020, material published on GOV.UK or other public sector websites must meet accessibility standards. This is so they can be used by as many people as possible, including those with:     

  • impaired vision 

  • motor difficulties 

  • cognitive impairments or learning disabilities 

  • deafness or impaired hearing 

There is now a contents page, with links, which is fully scrollable. Articles have been put into categories under a heading which is within the introduction to make it easier to find the updates and information you are interested in. 

The HTML format does allow you (dependent upon your web browser): 

  • to print off the document should you wish to keep a paper file: 

    • select the ‘Print this page’ button underneath the contents and print to your local printer     

  • to save the document as a PDF: 

    • select the ‘Print this page’ button and using the drop-down list on the printer select ‘print to PDF’, which allows you to save as PDF and file electronically 

    • on a mobile device you can select more options, then select options to be able to save as PDF 

Getting more information and sending feedback     

Make sure you are kept up to date with changes by signing up to receive our email alerts.     

You can also follow us on X (Twitter) @HMRCgovuk.     

Send your feedback about this Employer Bulletin or articles you may wish to see, by email to GRP128613644@hmrc.onmicrosoft.com.     

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