Guidance

August 2025 issue of the Employer Bulletin

Published 20 August 2025

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Introduction 鈥���

On 21 July 2025, the government published draft legislation for the Finance Bill 2025-26, outlining an ambitious package aimed at closing the tax gap and modernising tax administration.听听听

Key measures of interest to employers include:听听

In this month鈥檚 edition of the Employer Bulletin there are important updates and information on:鈥����

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Tax updates and changes to guidance鈥�

General information and customer support

HMRCs support for customers who need extra help鈥��

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.鈥赌���

Find out how to get help and the extra support available.鈥赌�

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P11D and P11D(b) for tax year 2024 to 2025

P11D and P11D(b) filing and payment deadlines听听

The deadline for informing HMRC online about any Class 1A National Insurance contributions that you owe for the tax year ending 5 April 2025 was on 6 July 2025. If you have still not done this, you need to submit without delay to avoid any further penalties which may be issued.听听

Any Class 1A National Insurance you owe must have been paid by 22 July 2025.听

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

You must submit your P11D and P11D(b) online.听

How to submit P11D and P11D(b) online听听听听

You can either submit using:听

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

What to file听听

If you paid any benefits and or non-exempt expenses, or if you payrolled any benefits, you need to file a P11D(b). Include the total benefits liable to Class 1A National Insurance contributions, even if you taxed some or all of them through your employees鈥� pay.听听听

The P11D(b) is used to report any employer鈥檚 Class 1A National Insurance contribution liability.听听听听

You need to submit a P11D for each employee in receipt of benefits and or non-exempt expenses unless you registered with us online before 6 April 2024 to tax them through your payroll. If you did not register online but then went on to tax some or all benefits through your payroll, you still must submit a P11D online for all benefits that were not payrolled.听

If you have not already registered online to payroll your company benefits, you may wish to do so now ahead of the 2026 to 2027 tax year by following the how to use the payrolling benefits and expenses online service guidance. This will mean you no longer need to send P11Ds, if you can payroll all your benefits.听听听听听

HMRC no longer accepts informal payrolling of benefits.听听

Nothing to declare听听

You only need to make a declaration if HMRC has asked you to submit a P11D(b) and you have nothing to declare.听听

You only need to tell HMRC 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.听听听听听

Helpful tips when completing P11D and P11D(b)听听

Some helpful tips to avoid common mistakes when completing P11D and P11D(b) are to:听

  • not put 鈥�6 April 2024鈥� in the start date and or 鈥�5 April 2025鈥� in the end date for your company cars, unless they are genuinely the dates your employee received or returned a company car听听

  • submit all P11D and P11D(b)s together, you are unable to submit over several days 鈥� only submit once you have completed all P11Ds and your P11D(b), if you make a mistake you will need to submit multiple amendment forms which will significantly slow down the process听

  • make sure you have included the approved CO2 emissions figure when reporting a fully electric car听

  • make sure you have included the approved CO2 emissions figure between 1 and 50 and have included the approved zero emissions mileage when reporting a hybrid car听

  • only send one P11D(b) for each scheme, showing the total amount due 鈥� do not send a separate one for employees and directors, as we treat each separate P11D(b) as an amendment to any we have previously received听

Check P11D(b) to see if you need to use the 鈥榓djustments鈥� section.听

Company Car tax Calculator听听

The new version of the Company Car Tax Calculator听 is available. For any car changes that an employee has within the Tax Year, a P46 Car form must be submitted.听听

PAYE Settlement Agreement 鈥� calculations and payment听

Submitting your calculation听听

The easiest way to send your PSA calculation is online. Tell HMRC the value of items in your PAYE Settlement Agreement is a service for employers to submit their yearly calculations online. This will determine the amount of tax and Class 1B National Insurance due for the tax year 2024 to 2025.听听

If you have no benefits to declare you must submit a nil calculation.听

To submit your calculation, you will need:听听听

  • your employer PAYE reference听听

  • the tax year of the PSA calculation 鈥� you must send a calculation even if it is a nil return听听

  • the type of expenses and benefits 鈥� you should only report those included in the PSA听

  • the number of employees receiving each expense or benefit, including any employees that earn below the personal tax allowance听听

  • the correct rate of tax for each employee听听

You must group the costs for each benefit together. For example, if staff entertainment is included in your agreement and you have 5 events that fall in that category, add all the costs together rather than making 5 separate entries.听

You must include all your calculations (English, Scottish and Welsh) on one submission. Submitting separate submissions for each may delay your calculations being processed.听

Making a payment听听听听

Any tax and National Insurance must be paid by 22 October 2025 if paying electronically, and by 19 October 2025 if you pay by post.听听

HMRC will automatically issue a payslip confirming the amount due and your payment reference number when your calculation is processed. All payments for amounts due under an agreement should be made by the due date. You must submit your calculations before making a payment. You do not need to wait until HMRC has processed your PSA calculation to make a payment. You may be charged interest on any amounts paid late.听

If you do not have a payslip, you must use the reference number quoted in the covering letter when your enduring PSA was first formalised. This is known as a SAFE reference. You can get your SAFE reference by phoning the Employers Helpline on 0300 200 3200. Do not use your submission reference, PAYE Accounts Office reference or PAYE reference number.听听

For any queries about payments, contact the payment helpline on 0300 200 3401.听听听听

Further information on PAYE Settlement Agreements is available.

View videos on PAYE Settlement Agreements:

  • 听

  • 听

  • 听

Employers PAYE disputed charges

From 31 July 2025, employers will be able to report a PAYE dispute to HMRC using a new online form. You can access the form at听get help to correct an employer PAYE bill.

From 31 of August 2025 you will no longer be able to report an Employers PAYE dispute through our helplines or webchat.

HMRC wins landmark Upper Tier Tribunal case against mini umbrella company fraud

Mini umbrella company fraud is a type of fraud within the temporary labour market.

From April 2026, recruitment agencies will be responsible for ensuring the correct tax is paid on worker鈥檚 income. Where no agency is involved, the end client will be liable.

On 17 July 2025, the Tax and Chancery Upper Tier Tribunal ruled that the mini umbrella company model used in the case was fraudulent. Read (1) ELPHYSIC LIMITED (2) PHYARREIDON LIMITED (3) ROSSCANA LIMITED (4) ZRAYTUMBIAX LIMITED v THE COMMISSIONERS FOR HIS MAJESTY鈥橲 REVENUE AND CUSTOMS [2025] UKUT 00236 (TCC). This confirms 贬惭搁颁鈥檚 ability to deregister these companies from VAT.

The tribunal confirmed that these mini umbrella companies fraudulently exploit the VAT Flat Rate Scheme. This is a government incentive designed to reduce administrative burden for honest, small businesses.

Mini umbrella companies also exploit the Employment Allowance. This is a government initiative that reduces an eligible employer鈥檚 National Insurance liability.听

Richard Las, Director at 贬惭搁颁鈥檚 Fraud Investigation Service, said:

鈥淲e are pleased the tribunal agrees the mini umbrella company model used in these cases is fraudulent. Mini umbrella company fraud creates an uneven playing field for businesses who follow the rules. We continue to use our civil and criminal powers to tackle those who are facilitating this type of fraud.鈥�

There is no standard model of mini umbrella company fraud. It typically involves separating workforces into smaller companies. This is to evade tax and exploit government incentives.听

This tribunal decision will help create fair competition for legitimate businesses. It also protects workers who unwittingly become victims of these fraudulent schemes.

HMRC has published guidance on mini umbrella company fraud. This includes specific support for workers who unwittingly fall victim to this fraud. Any information about any type of tax fraud or avoidance can be reported to HMRC. If you suspect mini umbrella companies are involved, mention it in your referral.

Tax updates and changes to guidance鈥����

Spotlight 69 鈥� liquidation of a Limited Liability Partnership used to avoid Capital Gains Tax 鈥�

Spotlight 69 highlights a tax avoidance scheme being marketed to landlords, which enables them to transfer their property business to a company using a Limited Liability Partnership (LLP), to save Capital Gains Tax (CGT).听

The schemes are typically claimed to work as follows:听

  1. 听An existing business operates for most of its active life as an unincorporated business.听

  2. 听The individual landlord incorporates an LLP.听

  3. 听The landlord transfers their rental properties, often with substantial accrued capital gains, to the LLP at market value.听

  4. 听After a short period, the LLP is put into Members鈥� Voluntary Liquidation (MVL).听

  5. 听The properties are then sold to a limited company owned by the landlord or connected parties 鈥� if continuing with the business.听

  6. 听For the purposes of the MVL, the LLP is seen to acquire its assets at the time of the contribution for its market value.听

It is claimed that this structure avoids CGT, Stamp Duty and Land Tax, and has potential Inheritance Tax benefits.听

You should be alert to the details contained in Spotlight 69 as it is 贬惭搁颁鈥檚 view that these schemes do 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.听

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.听

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.听听听听

Implementation of the Employment Rights Bill听

The Plan to Make Work Pay sets out a significant and ambitious agenda to make sure workplace rights are fit for a modern economy, empower working people and contribute to economic growth.听听听

The Employment Rights Bill will provide a new baseline of security for workers including:听听

  • through day one protection from unfair dismissal听

  • increasing protection from sexual harassment听听

  • strengthening Statutory Sick Pay听听

  • ending exploitative zero hours contracts and tackling fire and rehire听听听

On 1 July 2025 the government published the Employment Rights Bill Implementation Roadmap. The Roadmap provides clarity for employers and workers on how and when government will engage and consult on the detailed implementation of Bill measures once it becomes law, and when measures will take effect.听听听听

Policy timeline听听

Some measures related to industrial action and trade unions will come into effect in 2025. Policy measures will then be introduced in phases from April 2026, for example, new parents will be able to take Paternity and Unpaid Parental Leave from day one of employment.听听听听

Ending exploitative zero-hour contracts giving workers predictable hours and income, ensuring fairer, more secure work for all. This will be introduced from 2027.听听

The Department of Business and Trade will take a phased approach to consultations over summer, autumn and winter 2025 to early 2026.听听听

Preparing businesses for Vaping Products Duty and Vaping Duty Stamps鈥痵cheme

The UK Government is introducing a Vaping Products Duty (VPD) at a flat rate of 拢2.20 per 10ml of vaping liquid, alongside a Vaping Duty Stamp (VDS) scheme requiring stamps to be affixed to vaping products.

From 1 April 2026 businesses who manufacture, import or store vaping products in the UK must apply for approval for the VPD and VDS scheme, ahead of them coming into force on 1 October 2026.

The preparing for Vaping Products Duty and the Vaping Duty Stamps scheme guidance covers:

  • who these duties affect

  • what vaping products are covered

  • applying for approval

  • record keeping

  • next steps and contact information

General information and customer support

Live webinar 鈥� changes to Overseas Workday Relief听

From 6 April 2025 the previous rules for non-domiciled status ended and have been replaced by a system based on tax residence.听听

Subject to transitional arrangements, employees eligible for foreign income and gains relief will also be eligible for relief on relevant employment income which relates to duties performed outside the UK. This is known as Overseas Workday Relief.听听听听

You can .听听

This webinar will help you understand the main changes you need to be aware of, including:听听

  • how overseas workday relief has changed听

  • new financial limits听听

  • the transitional arrangements听听

  • employee record keeping requirements听听

Do not let your contractors fall into the trap of bad tax advice听

贬惭搁颁鈥檚 听 helps people working as contractors by empowering them to spot the warning signs of tax avoidance, and provides support to get out and get back on track if involved in tax avoidance.听听

To help your contractors avoid the financial pitfalls of tax avoidance, we would encourage you to share our:听听

  • online guides that explain how to spot tax avoidance and a short 听

  • interactive tools that help workers check if their contracts involve tax avoidance or review their payslips, so they can be confident they are paying the correct amount of tax听听听

  • real-life stories shared by people who want to help others steer clear of tax avoidance听听

By sharing this information, you can equip your workers with the knowledge they need to make informed and compliant decisions.听听听听

Contractors can also review our published list of named tax avoidance schemes and their promoters. Importantly, it is not an exhaustive list and HMRC never approve such schemes, no matter what some promoters claim.听听

Help spread the word by using our in your newsletters, on your websites and across your social media channels. Including sharing and liking our posts on , and . Every share helps protect more people from bad tax advice.听

Parents of teens reminded to go online to extend their Child Benefit claim by 31 August 2025听

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 拢1,354 a year in Child Benefit.听听听

Parents must confirm if their teens are staying in full time education, or training, before the deadline of 31 August 2025.听听

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.听听

The letter they will have received 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 鈥榚xtend Child Benefit鈥� and sign into their online account.听

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

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 拢60,000 and 拢80,000.听听

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.听

HTML format of Employer Bulletin鈥����

Since September 2020, material published on 51茶馆 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:鈥����

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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.鈥赌���

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Getting more information and sending feedback鈥����

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