Guidance

June 2025 issue of the Employer Bulletin

Published 18 June 2025

Introduction     

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 

PAYE Settlement Agreement calculations 2024 to 2025 

A PAYE Settlement Agreement (PSA) allows employers to make one annual payment to cover all the tax and National Insurance contributions due on small or irregular taxable expenses or benefits for your employees. A PSA stays in place until you change or cancel it, or we do.    

We recommend that PSA calculations for the tax year ending 5 April 2025, are sent to us by 31 July 2025, even if it is a nil return. The quickest and easiest way to do this is online, Tell HMRC the value of items in your PAYE Settlement Agreement .    

When we receive and process your calculation, we will send you a payslip confirming the amount you owe. When you pay, please quote the ‘PAYE Settlement Agreement reference’ on the payslip.   

You need to pay the total amount by 19 October 2025 or by 22 October 2025 if paying electronically. If you have not received your PAYE Settlement Agreement reference, you can get it by calling the Employers Helpline on 0300 200 3200.     

A reminder to submit your PSA calculation and to pay will be issued through your Business Tax Account in July. You cannot view your PSA liability and payment in your Business Tax Account.    

If we do not receive your calculation, we may issue a determination. This is an estimate of the amount of tax and National Insurance Contributions we believe you owe, which could be higher than your calculation.     

You can find further information on:  

• PAYE Settlement Agreements 

• help with PAYE Settlement Agreement calculations — GfC1 

• paying a PAYE Settlement Agreement 

Electronic payment deadline falls on a weekend  

In June 2025 the electronic payment deadline falls on Sunday 22 June 2025. To make sure your payment for the month reaches us on time, you need to have funds cleared into HMRC’s account by 20 June 2025, unless you are able to arrange a Faster Payment.  

It is your responsibility to make sure your payments are made on time and if your payment is late, you may be charged a penalty.    

Check your bank or building society’s single transaction daily value limits and cut-off times well in advance of making your payment. Make sure you know when to initiate your payment, so it reaches HMRC on time.  

Further information is available at pay employers’ PAYE.   

Lifetime allowance abolition — lump sum reporting  

Pension Commencement Excess Lump Sums   

For reporting Pension Commencement Excess Lump Sums (PCELS) for the 2025 to 2026 tax year you will need to:  

• report PCELS through Real Time Information (RTI)  

• set up a separate payroll record for PCELS to avoid issues with regular pension income reporting and tax records  

• use ‘one-off’ pay frequency and the payment date as the leaving date  

• provide a P45 to the customer for tax reclaim purposes  

• use data field 219 for PCELS and include the taxable part in data field 173 —  detailed guidance can be found in paragraph 2.2.9 of the 2025 to 2026 CWG2: further guide to PAYE and National Insurance contributions 

For the 2024 to 2025 tax year, follow the  guidance in March 2023 lifetime allowance newsletter.  

Stand-Alone Lump Sums   

For reporting Stand-Alone Lump Sums (SALS) for the 2025 to 2026 tax year you will need to: 

• report SALS through RTI only if there is an excess over the permitted maximum 

• set up a separate payroll record for taxable SALS, use ‘one-off’ pay frequency, and the payment date as the leaving date  

• provide a P45 to the customer for tax reclaim purposes  

• use data field 220 for SALS and include taxable and non-taxable elements in fields 173 and 174 respectively — detailed guidance can be found in paragraph 2.2.10 of the 2025 to 2026 CWG2: further guide to PAYE and National Insurance contributions.  

For the 2024 to 2025 tax year, follow the guidance in Pension schemes newsletter 151.    

You can find more information in our Lifetime allowance abolition — lump sum reporting article in the Pension schemes newsletter 167 issued in March 2025.  

We are aware that not all lump sums are being reported in this way and have been incorrectly reported on a regularly paid pension source. Pension schemes newsletter 170 includes an article to cover guidance on the process to follow to correct an individual’s tax record. 

Pensions for seasonal temporary staff  

If you are an employer taking on extra staff over the summer, you must check if these workers are eligible for automatic enrolment into a workplace pension.      

Employers must individually assess any seasonal or temporary staff every time they pay them. This includes staff with variable hours and pay, whether they are employed for a few days or longer.    

Employers who fail to comply with their workplace pensions’ duties may receive a warning notice with a deadline to comply. Those who continue to fail, risk a fine.     

If you have staff who you know will be working for you, for less than 3 months, you can use postponement to delay assessing those employees. This pauses the duty to assess those staff until the end of the 3-month postponement period.     

Further information on postponement and employing seasonal or temporary staff including who you need to enrol is available on The Pensions Regulator website. 

Extension of National Insurance contributions relief for hiring veterans 

The government has extended the employer National Insurance contributions relief for employers hiring veterans for a further year, from April 2025 until April 2026. Businesses employing qualifying veterans will pay no employer National Insurance contributions on earnings up to £50,270 during the veteran’s first 12 months in civilian employment. 

Paying Class 1A National Insurance contributions   

Electronic payments for Class 1A National Insurance contributions declared on your P11D(b) return for the tax year ended 5 April 2025 must clear into HMRC’s account by 22 July 2025.    

Make sure your payment is correctly allocated by providing the correct payment reference.   

Use your 13-character Accounts Office reference followed by 2513.  The reference should have no gaps between the characters.   

Adding 2513 is important because 25 tells us the payment is for the tax year ended 5 April 2025, and 13 lets us know the payment is for Class 1A National Insurance contributions.    

Further information on how to pay your Class 1A National Insurance contributions, including the green ’Pay Now’ button to select one of the secure payment methods is available.   

Organised labour fraud — the supply of labour through Employment Intermediaries  

There are organised criminal groups (OCGs) who are exploiting the supply of labour to the end users, which significantly reduces tax payments to HMRC including PAYE, National Insurance and VAT.   

Every business which either places or uses temporary labour should be aware of the potential dangers posed to their business by organised labour fraud in their supply chain. Not only can a fraudulent supply chain lead to reputational and financial damage to your business or organisation, but your workers may not receive all they are entitled to, such as holiday pay, sick pay and future benefits.   

To reduce the risk of your business, organisation or workers from becoming victims of this type of fraud, make sure that you have robust safeguards in place and carry out proper due diligence checks regularly on your supply chains. This will help you understand what service you are receiving and from whom. If you use another business to give you these assurances, you should make sure that these checks are being carried out properly and consider undertaking some due diligence checks yourself.  

As an end user or provider of temporary labour it is also your responsibility to be clear about who ultimately pays the workers and how they are paid. This is the only way to protect your business or organisation from becoming involved in labour supply chain frauds.   

We know that false payslips and PAYE Real-Time Information Returns are given by some intermediaries to others in labour supply chains to hide the fact that gross payments are incorrectly made to the worker. This is done to hide the fraudulent nature of the supply and we recommend that you undertake independent checks of the payslip directly with the worker.    

Due diligence checks to help minimise risks in supply chains  

The following due diligence checks are not a definitive list but are good practice examples of what you can do to minimise risks in supply chains.   

Make sure you know about the labour suppliers and umbrella companies used by understanding:   

• who they are   

• how they contract the workers they supply to you, or the end user   

• how they pay and operate PAYE for workers supplied   

Have a clear process for identifying which workers work through their own Personal Service Companies or an intermediary, even where the workers are not supplied directly by you.   

Find out if the direct labour supplier — if you use other recruitment companies or agencies, outsources both the: 

• workers  

• responsibility for paying those workers — if they do, you need to know which business they outsource to, and: 

  • why that business is involved 

  • if they are paying the taxes due on the workers’ earnings or not  

  • if they submit quarterly employment intermediary reports to HMRC and ask to see these reports to check if the information they have provided to HMRC agrees with your understanding of the supplies made 

  • confirm the recruitment agency has provided the workers with key information  

Documents and undertake sample checks with the workers to make sure they have received and understand these.  

Check pay slips and PAYE Real Time Information provided to you carefully. We are aware of false pay slips being given to third parties to attempt to demonstrate compliance with their tax obligations.   

You should ask to see payslips directly from workers, not accept at face value what an intermediary may give you.  

Check and refresh your due diligence processes regularly. Also check how often your suppliers do this for their suppliers.  

Check the names of any intermediaries used, and other company information, at Companies House carefully. Make sure you are satisfied this information is what you have been told and would expect to see where intermediaries are involved in the supply chain.   

We know that organised criminals adopt or register similar named companies to disguise that they have taken over the payroll responsibilities and small changes to company names can often go unnoticed.  

Look for changes in directors, especially to overseas directors and changes to the description of business activities, which may be an indicator further due diligence is needed by you to ensure the integrity of the supply chain.     

Reporting concerns  

If you have concerns about a supplier, or unpaid Income Tax, National Insurance contributions or VAT, you can: 

• report it to us using the online form  

• contact the HMRC fraud hotline on 0800 788 887 — open Monday to Friday 9am to 5pm, except bank holidays  

Tax refunds and underpayments

HMRC will send many letters in June and July, including:

• tax calculation letters for those who have paid too much or too little tax
• Simple Assessment letters for those who have underpaid tax and have a straightforward tax situation, for example, owing bank interest or getting incorrect tax relief

If your employees receive one of these letters, let them know the easiest way to claim a refund or pay the tax they owe is on the HMRC app.

Further information on how to claim a refund, paying tax and Simple Assessment is available.

Employers PAYE and disputed charges

HMRC is developing improvements to support disputed charges in PAYE for employers. 

Currently, you can submit disputed charges by calling our Employers Helpline on 0300 200 3200 or by writing to us at:

PT Operations North East England
HM Revenue and Customs
BX9 1BX
United Kingdom

HMRC is making improvements and will be introducing an online form which will enable you to report disputes on your PAYE liabilities. 

We will provide further updates when these improvements have been introduced.

Taxed award schemes

Third party companies may be engaged to provide non-cash incentive awards such as benefits or non-cash vouchers to employees on behalf of their employer.

Tax and Class 1A National Insurance is due on any such awards. If you are a provider of such awards, you should use a taxed award scheme (TAS) to make a payment to HMRC which covers the tax liability due on awards you make.

Employees must report the award on their tax return. They must be provided with the grossed-up value of the award and the tax paid on it so they can do this. It is unlikely they will have to pay any further tax if a TAS covers their award, unless they are liable to pay tax at a higher rate and the TAS only covers the basic rate.

The Incentive Award Unit deals with all aspects of a TAS, including the valuation of awards and the type of contractual arrangement. Further details on how to contact the Incentive Award Unit can be found here.

A TAS for awards given in the 2024 to 2025 tax year must be agreed by 6 July 2025.

Director and employee beneficial loans — returns due through P11D and P11D(b) by 6 July each financial year  

Loans made available to directors and employees of more than £10,000 each, may create a chargeable benefit. This benefit arises when an employment-related, taxable, cheap loan has been taken.    

A taxable cheap loan under the Income Tax (Earnings and Pensions) Act 2003, also known as ITEPA is an employment-related loan: 

• owed for all or part of the year in which the directors and employees are employed 

• with no interest paid, or the interest paid is less than the official rate of interest — 2.25% from 6 April 2023 

• where no exceptions in sections 176-179 ITEPA apply    

Loans should be reported on forms P11D and P11D(b) by 6 July each financial year.    

If you have provided loans, and these are not treated correctly for tax and National Insurance, you may not be meeting your obligations.    

There are some exceptions to the chargeable benefit.   

Under ITEPA, be aware that even if some or all of a loan is repaid within 9 months of the end of your accounting period, there may still be an employment income beneficial loan charge.    

Further information on loans provided to employees is available.   

P11D and P11D(b) filing and payment deadlines     

The deadline to inform HMRC about any Class 1A National Insurance contributions you owe for the tax year ending 5 April 2025 is 6 July 2025. Make sure that all submissions are made by this date as late submissions and failure to submit at all may result in a penalty.     

Payment must reach us by 19 July 2025 if paying by cheque, or 22 July 2025 if paying electronically.   

When submitting your P11D and P11D(b), make sure that the business name is entered exactly as registered, without any abbreviations, punctuation or alterations.    

If you make 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.    

There are a number of live webinars available that cover the process for submitting P11D and P11D(b). Further guidance is also available.       

How to submit P11D and P11D(b) online  

You can either submit using:

• HMRC’s PAYE Online service  for up to 500 employees
• commercial payroll software

You must submit all your P11D and P11D(b) together in one online submission.        

What to file        

You need to file a P11D(b) if you paid any benefits and or non-exempt expenses, or if you payrolled any benefits, in the tax year ending 5 April 2025. You should include the total benefits liable to Class 1A National Insurance contributions, even if you taxed some or all of them through your employees’ pay.       

You need to submit a P11D for each employee in receipt of benefits and or non-exempt expenses, unless you registered to payroll your company benefits and expenses with us online before 6 April 2024.  

If you have not already registered to payroll your company benefits, you may wish to do so now ahead of the 2026 to 2027 tax year. This will mean you will no longer need to send P11Ds for future tax years. The only benefits you cannot payroll currently are loans and accommodation.  

HMRC no longer accepts informal payrolling of benefits.     

Informing HMRC if you have not paid any expenses and benefits    

You only need to tell us that you do not need to make a return if we sent you an electronic notice to file a P11D(b) or a reminder to file a P11D(b) letter. You can tell us by completing a no return of Class 1A National Insurance contributions form.   

Helpful tips when completing P11D and P11D(b)

All your P11Ds must be completed online and submitted at the same time as your P11D(b) submission. It is not possible to submit P11Ds separately over several days. Before you submit, check all forms are completed correctly. If you do not and you have made a mistake, you will need to submit multiple amendment forms and this will significantly slow down the process.    

Only send one P11D(b) for each scheme, showing the total amount due. Do not send a separate one for employees and directors. We treat each separate P11D(b) as an amendment to any we have previously received.    

Use the correct start and end dates for company car benefits — even if these are outside the relevant tax year. Do not put ‘6 April 2024’ as the start date or ‘5 April 2025’ as the end date for your company cars, unless they genuinely are the dates your employee received or returned a company car.     

When reporting a fully electric car, make sure you have included the approved CO2 emissions figure.     

When reporting a hybrid car with an approved CO2 emissions figure between 1-50, make sure you have included the approved zero emissions mileage.    

Tax updates and changes to guidance     

Mandating the reporting of benefits in kind and expenses through payroll software   

On 28 April 2025, the government announced that the mandatory reporting and paying of Income Tax and Class 1A National Insurance contributions on benefits in kind (BiKs) will be introduced from April 2027 instead of April 2026. This will provide more time for employers, payroll professionals, software providers, tax agents and other stakeholders to prepare for the change.  

HMRC has published an updated technical note which provides more operational information on how businesses can adapt to these changes in time for April 2027.  

Get ready for payrolling  

It may be worth registering to voluntarily payroll benefits in kind  from April 2026. This will help you to familiarise yourself with the process of reporting BiKs through payroll software in readiness for mandatory payrolling. It will also provide an opportunity to test how your organisation’s payroll processes and systems work and adapt them for real-time reporting if required.    

If you wish to do this, you must register for voluntary payrolling by April 2026 to be able to voluntarily payroll BiKs in the 2026 to 2027 tax year. You can only start to payroll benefits and expenses from the beginning of the new tax year.  

Not all BiKs can be reported through the current voluntary payrolling system for the 2026 to 2027 tax year. Employment-related living accommodation, interest free, and low interest beneficial loans will still need to be reported on a P11D for Income Tax. For the 2026 to 2027 tax year, you will still need to report the Class 1A National Insurance for all BiKs by submitting a P11D(b) online form. You must still complete and submit P11D forms for any benefits and expenses which have not been payrolled.  

Make sure you inform your employees about moving from a P11D and P11D(b) to real-time reporting.   

More information about how to report expenses and benefits you provide to employees or directors through the voluntary payrolling system is available.  

We will continue to engage with stakeholders to make sure that the mandatory reporting of BiKs and taxable expenses through payroll software works for both HMRC and customers.  

Use of VAT grouping within the care industry 

A Revenue and Customs Brief 2 (2025): the use of VAT grouping within the care industry has recently been issued by HMRC. The brief explains that a VAT grouping structure used by some state-regulated care providers to recover VAT on costs that relate to supplies of welfare services that would otherwise be exempt from VAT, is considered a form of tax avoidance.  

It also explains the action HMRC will take on new and existing VAT groups.  

New VAT group applications  

HMRC will make full use of its powers to protect VAT revenue. Where necessary it will refuse new VAT group registration applications that are designed to implement and facilitate these VAT grouping structures.   

Existing VAT groups  

HMRC is launching a programme immediately to review and investigate all instances where it is known or suspected that an avoidance scheme is in operation within a VAT group arrangement. The brief outlines the powers that will be used to challenge such arrangements and suggests that organisations currently using these arrangements may want to review their current VAT accounting practices independently and seek professional advice. The brief also explains that any powers used will only take effect once the investigation is complete. This means that where this specific arrangement is in place, HMRC will not seek to claim tax back from any earlier period. If during the investigation inaccuracies are identified in other areas, tax may be recovered in relation to those inaccuracies.  

Further information regarding how the arrangements claim to work can be found in a Spotlight article.   

Where you believe that your business’s arrangements fall within the description given in the brief and Spotlight article, you should email CAGetHelpOutOfTaxAvoidance@hmrc.gov.uk and include the words ‘VAT grouping’ in the subject of your email.  

HMRC’s wider approach to tax avoidance  

If you are involved in a tax avoidance scheme HMRC will fully investigate your tax affairs and may treat you as a high-risk taxpayer. This means HMRC will closely inspect all of your tax affairs in future, not just your use of the avoidance scheme.  

Report a scheme   

You can report tax fraud and tax avoidance arrangements, schemes and the person offering you them to HMRC by using our online form to report tax fraud.  

You can submit this form anonymously and do not have to give your name, address or your email.   

You can contact the HMRC fraud hotline if you cannot use the online service.

Telephone: 0800 788 887
Outside UK: +44 203 080 0871
Monday to Friday, 9am to 5pm (except bank holidays)
Find out about call charges

Basic PAYE Tools — updated release  

An important maintenance update to the Basic PAYE Tools (BPT) was released at the beginning of April 2025, following the main release towards the end of March 2025, for the 2025 to 2026 tax year. It is important that you update and use the latest release of BPT, which is version 25.1.   

To update or check for updates you should: 

• select ‘Check now’ in the update section of settings in the top right-hand corner of the tool   

• set the automatic update to ‘Yes’  

As a new customer, before you can use BPT to run your payroll, you must have registered for online PAYE as instructed in your new employer letter.  

Further guidance on service availability and issues and help on how to download BPT is available.   

Spotlight 68 — using prepaid debit cards for profit extraction to reduce profits and disguise income  

Spotlight 68 provides information on a tax avoidance scheme being marketed to companies that aims to reduce Corporation Tax and VAT liabilities whilst also claiming to provide non-taxable income for directors, their associates or both.    

This is claimed to work as follows:  

1. A company buys ‘advertising’ from the scheme. This expenditure is included in the profit and loss account of the user. It is claimed this is tax deductible.  

2. An amount often equal to at least 80% of the amount spent on “marketing” is then returned to directors or employees in the form of “loyalty points” which are converted to monetary amounts and charged to prepaid cards.  

3. The recipients of these cards then spend the amounts on these cards as they wish. It is claimed that the “loyalty points” are not taxable income.  

You should be alert to the details contained in Spotlight 68 as it is HMRC’s view that this scheme does not work, and we will challenge anyone promoting such arrangements. People who use these arrangements may have to pay more than the tax they tried to avoid as well as paying interest, penalties and high fees for using such schemes.  

If you think you are already involved in this arrangement and want to get out, HMRC can help. HMRC offers a range of support to get you back on track or avoid being caught out in the first place. Contact HMRC for help getting out of an avoidance scheme if you have any concerns.    

You can report tax fraud and tax avoidance arrangements, schemes and the person offering you them to HMRC by using our online form to report tax fraud.  

Changes to Corporation Tax reminders, statements and receipts  

As part of HMRC’s continuing efforts to improve its services to send and receive taxpayer information digitally, HMRC is no longer sending paper copies of some Corporation Tax (CT) letters where customers and agents can access the same information through online services when they need it.   

From June, we will no longer automatically send the following non-statutory Corporation Tax letters:  

• CT205/A return reminders for companies and agents  

• CT207 interest statement  

• CT209 payment receipt  

• CT603A agent list of issued notices to deliver Company Tax return   

• CT608 instalment payment reminder  

We will also trial no longer sending CT208 Corporation Tax reminder letters before we stop sending them permanently. The trial will initially stop sending reminders to a small population of customers with agents and, if successful, we will increase this and eventually include the CT208 reminders to customers. We will monitor the effect and stop the trial if we see a negative impact on our customers or process.  

There are no changes to the Corporation Tax process itself. Companies can access their HMRC online accounts and agents can access HMRC’s Corporation Tax for Agents online service to view liabilities and payments. Information on the Company Tax returns is available, including guidance on the Corporation Tax accounting periods.  

General information and customer support  

Do not let your contractors get caught out by tax avoidance  

HMRC’s ‘don’t get caught out’ campaign helps people working as contractors steer clear of bad tax advice by spotting the tell-tale signs of tax avoidance.   

Anyone working for you as a contractor can find out more about tax avoidance from our:  

• online guidance, including guides and a short YouTube video to spot the signs of tax avoidance and understand how umbrella companies work  

• interactive tools to see if their contracts involve tax avoidance or check their pay packets to make sure they are paying the right amount of tax  

• personal stories from people caught up in tax avoidance who want to share their experiences as a warning to others   

Contractors who have used a tax avoidance scheme can also find the support they need to leave and report it to HMRC by visiting the ‘don’t get caught out’ campaign page.   

Details of tax avoidance schemes and their promoters that we have named are also published. This is not a complete list, and remember that contrary to what some promoters tell prospective clients, HMRC never approves tax avoidance schemes.   

We know that many people who become involved with tax avoidance regret it and want to get back on track. We want to help them by offering the support they need, free of any judgement, to get out and settle their tax affairs in an affordable and timely way.   

We encourage you to share our supportive campaign resources across your newsletters and websites. Including sharing and liking our posts on social media channels such as Facebook, LinkedIn, X.  

Statutory Neonatal Care Leave and Pay  

On 6 April, the government introduced a new statutory entitlement to Neonatal Care Leave and Pay. This provides employed parents whose babies are admitted to neonatal care with a day-one employment right to take up to 12 weeks off work, depending on the length of time their baby is in neonatal care. Eligible parents are also entitled to up to 12 weeks of statutory pay.  

The Neonatal Care Leave and Miscellaneous Amendments Regulations 2025 and The Statutory Neonatal Care Pay (General) Regulations 2025 were approved by the Houses of Parliament on Monday 17 March 2025. These Regulations set out the main provisions of the new entitlement, including:  

• a broad definition of a parent which captures a range of parental and personal relationships — including adoptive parents, parents who are fostering to adopt and the intended parents in surrogacy arrangements  

• the ability to take the leave flexibly, in blocks of at least one week, when the child is still receiving neonatal care, including a week afterwards, and the requirement to take the leave in a single continuous block at any other period within 68 weeks of the child’s birth  

• notice requirements in order to take Neonatal Care Leave  

• notice and information requirements to take Statutory Neonatal Care Pay  

The government has also made Regulations to make amendments to other secondary legislation in order to reflect the introduction of Statutory Neonatal Care Leave and Pay, as well as to deal with the administration of the new statutory payment, and the entitlement of certain persons abroad and mariners to this payment. Together, these Regulations ensure consistency between Neonatal Care Leave and Statutory Neonatal Care Pay and other, existing family-related leave and pay entitlements.   

Further guidance on Statutory Neonatal Care Pay and Leave for employers and Neonatal Care Pay and Leave for employees is available.   

Employment related securities — end of year return deadline for employee share schemes  

Gifts and awards of shares in companies, often known as employment related securities (ERS), are commonly used by employers to reward, retain or provide incentives to employees.    

If you operate an ERS scheme you must file an end of year ERS return, including nil returns. You must do this for every scheme that is registered on the ERS online service against your PAYE scheme.  

For 2024 to 2025 tax year, you must submit an end of year ERS return on or before 6 July 2025.  

If you miss the deadline a £100 late filing penalty will be issued to the address of the associated PAYE account.  

Additional automatic penalties of £300 will be charged if you have not submitted the return 3 months after the original deadline of 6 July 2025. A further £300 will be charged if it is still outstanding six months after this date.  

The charge description for penalties relating to employee share schemes will refer to employment related securities.  

If you appeal against an ERS late filing penalty, you must make sure you have submitted your outstanding end of year returns. An end of year return must be submitted to prevent further penalties.   

To register for ERS, you need an employer PAYE reference number. To submit an end of year ERS return you must have already registered your scheme on the online service.  

If a scheme has been registered in error, or it is no longer operating, the scheme must be ceased online. This cannot be done by an agent, only the employer can cease the scheme online.  

An ERS scheme needs to be linked to a live employer PAYE scheme. If you are closing your PAYE scheme, you should consider whether you also need to cease your ERS scheme.  

Once an ERS scheme is ceased, an annual return or nil return must still be submitted for the tax year in which the final event date falls.  

End of the Alcohol Duty Stamps Scheme 

The Alcohol Duty Stamp Scheme closed on 1 May 2025.     

This scheme applied to larger retail containers of higher alcoholic strength products — those of a volume of 35cl or more, and a strength of at least 30% alcohol by volume.     

Products previously within the scheme, typically higher strength spirits, no longer require a ‘UK Duty Paid’ stamp.   

Producers and importers should now stop stamping retail containers with the duty stamp design. They should update their bottle label designs for new stock.  Existing stamped stock will remain legal for sale and supply, while legacy stamped stock is used up.    

Traders should remind themselves of the risks typically associated with illicit alcohol products. Where applicable, wholesalers and retailers must also follow the requirements of the Alcohol Wholesaler Registration Scheme.  

Practical guidance about the end of the scheme is available in the Revenue and Customs Brief: End of the Alcohol Duty Stamps Scheme.  

New guidance and tools for umbrella companies  

For the first time, HMRC has published guidance specifically written for umbrella companies operating in the temporary labour market. This important development aims to set clear expectations and raise standards across the sector.  

New umbrella company guidance    

The guidance outlines examples of good practice for umbrella companies in the temporary labour market which:  

• aims to improve how the market functions  

• sets out actions supporting compliance  

• encourages a level playing field across the temporary labour market  

This guidance serves as a step towards raising standards while the government plans formal regulatory umbrella companies oversight. It helps create a fairer market and enables workers, businesses, and supply chain stakeholders to understand what responsible umbrella company operation looks like.  

Updated work out pay from an umbrella company tool     

Employment businesses who use umbrella companies and their workers can now access HMRC’s updated work out pay from an umbrella company tool. This tool:  

• generates comprehensive pay and deduction illustrations calculations based on assignment rates   

• helps verify if pay and deductions are legitimate and accurately calculated  

• incorporates the 2025 to 2026 financial year rates and thresholds  

• is completely anonymous with no collection of identifying details    

This resource supports employment businesses in meeting compliance obligations while ensuring workers are better informed about their pay entitlements and are protected from tax avoidance schemes.  

Future changes to Statutory Sick Pay 

As part of the Plan to Make Work Pay, the Government is making changes to Statutory Sick Pay (SSP). Through the Employment Rights Bill, we are strengthening SSP to make sure that all employees have access to SSP from the first day they need to take time off work due to sickness, irrespective of their earnings.   

Key changes to SSP 

SSP will be available from day one. We are removing the waiting period, meaning employees are now eligible to receive SSP from the first day of sickness absence as opposed to day four which is currently the case.    

We are also removing the Lower Earnings Limit as an eligibility criterion for SSP, meaning all eligible employees, regardless of their earnings, will have access to SSP when off sick. Employees will be entitled to 80% of their normal weekly earnings, or the flat rate, currently £118.75, whichever is lower.  

The Department for Business and Trade are leading work to create a Fair Work Agency, a new executive agency which will bring together existing enforcement functions into one place, so employment rights are enforced more effectively and efficiently. It will also take on enforcement of additional rights, including the right to SSP.  

Next steps 

As we move forward with our commitment to strengthen SSP, we want to continue to listen and learn from employers, employees and stakeholders to support the introduction of these measures. We would be keen to engage with employers and payroll providers, given your considerable expertise, to discuss how these changes can be implemented successfully. We would also like to understand what support is needed to introduce these significant changes, including information and guidance that may be required.  

The Employment Rights Bill is only the first phase of delivering the Plan to Make Work Pay. Alongside the government’s new Industrial Strategy, the Bill will support the government’s mission to increase productivity and create the right conditions for long-term sustainable, inclusive and secure economic growth. In parallel, we asked Sir Charlie Mayfield to lead the Keep Britain Working review, which will consider recommendations for government to work closely with business, and to build a partnership to improve the quality and inclusivity of work.

If you would like to get in touch regarding the changes being made to SSP, or would be willing to share your thoughts and expertise email the SSP Policy Team at SSP.Team@DWP.gov.uk.  

Further information on Statutory Sick Pay and Statutory Sick Pay — Lower Earnings Limit Removal Structure is available at Employment Rights Bill: factsheets. 

Parents of teens reminded to go online to extend their Child Benefit claim  

If you have employees with children, aged between 16 and 19 years old, there is important information they need to know so they do not miss out on up to £1,354 a year in Child Benefit.   

We are writing to parents to let them know that they must confirm if their teens are staying in full time education, or training, before the deadline of 31 August 2025.  

You can help your employees to get the payments they are entitled to by reminding them to extend their Child Benefit claim online or through the HMRC app.  

The letter they will receive contains a handy QR code which takes them straight to the digital service within Child Benefit when your child turns 16 guidance. In the guidance they can also check eligibility, or they can search ‘extend Child Benefit’ and sign into their online account. 

If parents do not tell us by 31 August 2025, their Child Benefit will stop.  

If your employees or their partners have opted out of getting Child Benefit payments because of their income, they still need to extend their claim. The amount parents can earn before they need to pay the High-Income Child Benefit Charge has now increased to between £60,000 and £80,000.  

You should encourage your employees to use the online Child Benefit tax calculator to get an estimate of how much benefit they will receive, and what the charge may be.  

It may now be worthwhile for them to opt back into payments or make a claim if they have not done so before. It is quick and easy to do in the HMRC app or online.  

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