This bulletin follows the release of the December and January Agent Updates (Issue 126 and Issue 127). In this issue we cover the content most relevant to employment taxes and reward activities.

Self-assessment deadline

• A reminder that the deadline to file the self-assessment tax return for the 2023/24 tax year is 31 January 2025.
• HMRC is encouraging individuals to file the online return as soon as possible to avoid any delays and penalties. If the return is filed late, an automatic penalty of £100 will be issued by HMRC in the first instance.

Simple assessment – reminder to pay

• HMRC is urging taxpayers who have received a simple assessment letter to pay by the deadline of either 31 January 2025 or three months from the date the letter was issued, whichever is later.
• More information on paying a simple assessment tax bill is on GOV.UK.

Authorising a tax agent – form 64-8

• HMRC has shared some hints and tips for completing form 64-8 to help process these quickly and avoid delays. 
• Check what a paid agent can do on your behalf and download the latest version of form 64-8. As a reminder, it is not acceptable for an agent to directly control a client’s online tax account, or register such an account to their own email address. The HMRC standard for agents also explicitly states that agents must never ask any client to share their Government Gateway user ID and password.
• Do not include a covering letter, unless it contains information that is absolutely necessary to process the form. Any essential information should be added to the covering letter, not outside the boxes on the form. 
• Do not provide any additional information in the form fields other than the requested information (for example, in the “agent code” field, only include the correct self-assessment agent code, consisting of six characters in the format 1111XX).
• The form should either be typed or handwritten. Do not strikethrough any unused boxes or make any marks in the margin of the form.
• Provide the correct agent codes for the relevant tax regimes. 

2025/26 student and postgraduate loan thresholds and rates

• The Department for Education announced the new student loan plan type and postgraduate loan thresholds and rates from 6 April 2025. These are:
  • plan 1 - £26,065;
  • plan 2 - £28,470;
  • plan 4 - £32,745; and
  • postgraduate loan - £21,000
• Deductions will remain at 9% for plan 1, plan 2 and plan 4 and at 6% for postgraduate loans. 
• Student loan and postgraduate loan repayment guidance for employers will be updated on 6 April 2025.

HMRC’s calculator for umbrella company workers

• HMRC has a new calculator that estimates take-home pay for umbrella company workers. The tool can also help employment businesses understand the pay of umbrella company workers they supply. 
• The calculator should help workers to:
  • estimate take-home pay using payslip information;
  • check common deductions including income tax, NICs and pension contributions;
  • identify potentially incorrect deductions; and
  • understand assignment rates, gross pay and net pay. 

Paying voluntary National Insurance Contributions (NICs)

• Individuals have until 5 April 2025 to fill gaps in their National Insurance records dating back to 6 April 2006.  After this deadline, individuals will only be able to make payments for the previous six tax years.
• HMRC recommends using the “pay by bank account” option online for a fast and secure method which helps prevent errors that could lead to delays. Payments made this way will typically be reflected in the individual’s National Insurance record within five working days.
• More information on voluntary National Insurance contributions is available on GOV.UK

Changes to repayment processing when agents become insolvent

• HMRC has changed the way they handle repayment requests when an agent becomes insolvent. This affects cases where the agent is shown on the PAYE repayment claim as the nominee to receive repayments on behalf of taxpayers.
• Where agents become insolvent, any repayments due to their clients would be paid directly to the clients to ensure that they receive the money they are owed promptly.
• At this stage, the change applies to the following repayments:
  • marriage allowance;
  • income tax deducted from savings and investments (R40); and
  • employment expenses (P87).
• HMRC will provide an update when the process extends to other types of repayments.

New online iForm for PAYE employment expenses (P87)

• HMRC has now re-implemented the ability to claim tax relief on work expenses through an online form. This will make it easier for employees to claim employment expenses. 
• Before submitting a claim, individuals or agents should review HMRC’s updated issue briefing on evidence required to claim PAYE expenses.