This bulletin follows the release of the May Agent Update (Issue 131). In this issue we cover the content most relevant to employment taxes and reward activities.

Employment related securities (ERS) return deadline

• The deadline for filing annual ERS returns is 6 July 2025. Missing the deadline will result in an automatic late filing penalty of £100 being charged to the employer. 
• Returns, including nil returns, must be submitted for every scheme that has been registered. 
• An ERS scheme needs to be linked to a live employer PAYE scheme. 
• If a scheme has been registered in error or it is no longer required, employers must cease the ERS scheme using these steps. Once a scheme is ceased, an annual return must still be submitted for the tax year in which the final event date falls. 

Postponement of mandatory payrolling of benefits in kind (BIKs)

• Following feedback from external stakeholders, the Government announced that the introduction of mandatory payrolling of BIKs will be delayed from 6 April 2026 to April 2027. 
• HMRC has published a technical note mandating the reporting of benefits in kind and expenses which provides more operational information on how businesses can adapt to these changes in time for April 2027. 
• Employers are being encouraged to register to voluntarily payroll BIKs from April 2026 to familiarise themselves with the process of reporting BIKs using payroll software in readiness for mandatory payrolling. 

Check Employment Status for Tax digital tool (CEST) revisions

• HMRC is revising its CEST digital tool with effect from 30 April 2025. These changes will make it easier for CEST’s users to use the tool. 
• To support these changes, HMRC will publish revised guidance that offers help on how to answer the revised questions. HMRC’s stated position is that they will stand behind the outcomes of this tool where it has been used correctly. There is clearly an element of subjectivity when it comes to what the “correct” use of the tool is, so it is important to refer to the guidance when completing the CEST tool. Read the guidance for the updated tool.

Employer’s national insurance contributions (NICs) elections process

• In certain limited circumstances, an employer can transfer employer’s NICs liability to an employee who acquired employment related securities from the employer. 
• From 1 May 2025, employers can use a new election template which has been introduced to simplify the process to make a joint election to transfer the liability. This election no longer needs to be submitted to HMRC for pre-approval. See the new election template.

Simple assessment

• From June 2025, HMRC will begin issuing “simple assessment” letters providing detailed calculations for any tax owed by individuals for income received between April 2024 and April 2025. 
• Simple assessment letters will be sent to individuals who are not part of self-assessment and either do not have a PAYE tax code, or where HMRC cannot deduct the tax due automatically through that process. 
• The simple assessment letter will set out exactly what individuals need to do and includes information about:
  • how much tax is owed; 
  • when it needs to be paid (usually by the following 31 January); and
  • how to pay it, including what to do if you disagree with the assessment. 

Self-assessment criteria review

• The income tax self-assessment reporting thresholds for trading, property and “other taxable” income will be aligned and changed to £3,000 (gross) each. This change to the threshold for income to be reported through self-assessment does not affect the amount of tax due. The £1,000 tax-free trading allowance will remain the same. 
• The reporting threshold changes will remove the requirement for up to 300,000 taxpayers to submit a self-assessment return. Taxpayers will have a choice to remain in self-assessment or report taxable income below £3,000 through a new digital reporting service.