Employment taxes for a new tax year

Cometh the new tax year, cometh the hundreds of emails from HMRC…

At the start of every new tax year, HMRC makes hundreds of changes to their guidance (et al), which triggers hundreds of emails to those numpties who sign up for each and every one of them. Yes, that includes me and Andrea. So in a “I’ve reviewed them, so you don’t have to”, here’s a quick (believe it or not!) summary of the main employment tax related updates/changes issued by HMRC on Sunday (yes, I'm aggrieved even though it was the start of the tax year), 6 April.

Income/Income taxes

The following guidance/paper/etc have been updated to include the 25/26 rates, allowances, thresholds, etc

• Rates and allowances for Income Tax, including the previous 3 tax years
• Student loan and postgraduate loan repayment guidance for employers
• SL3: Student and Postgraduate Loan deduction tables
• Apprenticeship Levy

There’s also guidance updates for the affect of the new Foreign Income & Gains on PAYE operations, including (but see new HMRC guidance for Global Mobility for more detail):

• New employee coming to work from abroad
• CWG2: further guide to PAYE and National Insurance contributions (Chapter 4)

Statutory Neonatal Care Pay (SNCP)

Statutory Neonatal Care Pay and Leave: employer guide – a useful high level guide to how SNCP applies, employee eligibility, the various notice periods and the records employers must retain. The employee version of this guidance is here

Business changes that affect payment of Statutory Neonatal Care Pay – covers what happens when you have taken over a business under TUPE regulations, when you have stopped trading, when you have become insolvent, and when you have made an employee redundant.

Tell an employee that they're not eligible for Statutory Neonatal Care Pay (NEO1) – form for telling an employee they’re not eligible for SNCP

Statutory Neonatal Care Pay record sheet (NEO2) – form to record details of your employees SNCP

How different employment types affect Statutory Neonatal Care Pay, including: You can find a BUFDG summary of this guidance here.

Manually calculate Statutory Neonatal Care Pay – how to manually make the calculation if your software or employer calculator doesn’t (or doesn’t work, or you want to double-check!)

Employee circumstances that affect payment of Statutory Neonatal Care Pay – have a look at the BUFDG post here summarising the different scenarios.

Other statutory benefits

Statutory pay and leave – SNC Pay & Leave added

Manual calculations for: Statutory Parental Bereavement Pay, Statutory Paternity Pay, Statutory Adoption Pay; Statutory Maternity Pay, and Statutory Sick Pay

Pensions

Pension schemes rates and allowances for 2025/26

From 6 April 2025 Overseas Pension Scheme (OPS) and Recognised Overseas Pension Scheme (ROPS) established in the European Economic Area (EEA) must meet the same conditions as those schemes established in the rest of the world. As a result, a number of HMRC guidance documents have been updated, including:

• Overseas pensions: stop being a QROPS
• Overseas pensions: set up your scheme for migrant member relief
• Check the recognised overseas pension schemes notification list
• Overseas pensions: tell HMRC you’re a qualified recognised overseas pension scheme

The guidance documents, Send pension scheme reports, Information requirements for pension schemes, Submit a pension scheme return using the Managing pension schemes service and Pension schemes online user guide were updated to confirm that:

• from the 2024 to 2025 tax year, the Managing pension schemes service is used to submit your return, and ‘0’ PTSR numbers will also need to migrate over; and
• For the 2023 to 2024 tax year and earlier, you must use the Pension schemes online serviceto submit any new pension scheme returns.

Employer National Insurance

You can find updated rates, allowances and thresholds for 2025/26, for

• National Insurance contributions
• Employment Allowance
• CA38: National Insurance contributions tables A, D, F, H, J, L, M, N, V and Z
• CA41: National Insurance contributions tables B, C, E, I, K and S
• CA40: employees allowed to pay their own National Insurance
• CA44: National Insurance for company directors
• How to complete P11D and P11D(b)

Plus you can Check if you can claim National Insurance relief in UK Freeport or Investment Zone special tax sites

Benefits

The best ‘go to’ guidance in my opinion, from HMRC is Booklet 480 (updated each tax year), where you can find easily digestible information on the tax implications of most expenses and benefits. The changes made for the 2025/26 version include:

• Taxable fuel provided for company cars and vans (480: Chapter 13) - no changes to approved mileage rates or passenger payments; Company van charge increases to £4,020 (from £3,960) and Fuel charge increase to £28,200 (from £27,800) for cars and £769 (from £757) for vans
• Work out the appropriate percentage for company car benefits (480: Appendix 2) - Rates for petrol/hybrid vehicles for 25/26 – 1% increase across the board up to max 37% (160 CO2 and above therefore unchanged)
• Statutory Neonatal Care Pay has been added to the list of statutory payments in section 'Meaning of qualifying childcare' in Employer Supported Childcare (480: Appendix 11)

Employment status & umbrellas

Check for signs of outsourced labour payroll fraud – added commentary for works if they are working through an agency or umbrella company

Examples of good practice for umbrella companies in the temporary labour market – guidance specifically targeted at umbrella companies to ensure they operate compliantly

Work out pay from an umbrella company – designed for workers to check that their pay is being calculated correctly

Global Mobility

New HMRC guidance for global mobility - HMRC has published new guidance on globally mobile employees, looking at how income tax is affected with inbound/outbound working. It essentially a high level overview of manual contents but it’s very useful and has been split into three documents:

1. Effect of residence on an employee’s liability to UK income tax – scope of UK income tax on general earnings from 6 April 2025. The BUFDG summary of this document is here and will be useful for individuals responsible for global mobility at your institution
2. Overseas Workday Relief – information on changes to the Overseas Workday Relief (OWR) regime from 6 April 2025. The BUFDG summary of the OWR guidance can be found here and will be useful for individuals responsible for global mobility at your institution
3. Globally mobile employees and PAYE – operating PAYE for globally mobile employees from 6 April 2025. The BUFDG summary of this document is available here and will be of particular use to payroll professionals as it goes into detail on the changes to the S690 applications (GME PAYE notification). You can make the application using HMRC’s online tool here

For those of you who are looking for more technical analysis, HMRC has also published their technical manual The Residence and FIG Regime Manual.

HMRC’s online tool for GME PAYE notification (S690s) - There’s new guidance from HMRC on making an application to apportion earnings for employees who work in the UK and overseas. Tell HMRC that you'll operate PAYE on a proportion of an employee's income sets out:

·       the eligibility criteria

·       when to send your notifications (during the tax year they are eligible)

·       the information you’ll need to make the application,

plus the online link to make the notification - you’ll need to sign in with your Government Gateway user ID and password.