This bulletin follows the release of the October Agent Update (Issue 136). In this issue we cover the content most relevant to employment taxes and reward activities.

Limited authorisation for agents

• HMRC no longer accept forms “64-8 authorising your agent” to request an agent be given limited authorisation to act on behalf of an individual or business.
• If clients would like an agent to deal with a specific area of their tax affairs but not act as a full tax agent on HMRC’s records, this will now be called “limited authorisation”.
• An agent with limited authorisation can:
  • talk to HMRC and answer any questions on a client’s behalf; and
  • help clients to fill in tax forms.
• The agent will not have access to the client’s tax affairs online.
• To give an agent limited authorisation to help with tax queries, clients must write to HMRC at National Insurance contributions and Employers Office, HM Revenue and Customs, BX9 1AN.
• The letter of authority must include the:
  • client’s name and address;
  • client’s tax reference number, for example their Unique Taxpayer Reference (UTR);
  • name and address of the agent they want to authorise; and
  • client’s signature.

New student loan plan type – Plan 5

• The Department for Education has introduced a new student loan Plan type 5. Repayments are due to begin from 6 April 2026.
• Key details of Plan 5 are as follows.
  • Plan 5 will be operated and collected in the same way as current plan types 1, 2 and 4.
  • The earliest repayments will start for PAYE is 6 April 2026.
  • The earliest repayments will start for self-assessment is 6 April 2027.
  • The annual repayment threshold will be £25,000.
  • Repayments will be made at 9% on earnings over the £25,000 threshold.
  • Employers will begin to receive student loan start notices from March 2026 for Plan 5 borrowers due to go into repayment from April 2026.
  • Plan 5 is for those who applied to Student Finance England and started courses from August 2023 onwards.
• Software developers are working on payroll updates due to be in place by 6 April 2026. 

A reminder about National Insurance calculations for directors

• Directors are subject to class 1 National Insurance contributions (NICs) on an annualised basis. This means that employers should check the amount due at the end of the tax year to identify any shortfalls.
• Although this applies to all tax years, there are particular concerns where there were in year changes to the class 1 NICs rates, for example, the 2022/23 tax year.
• Employers should review their submissions and self-correct any underpayments through PAYE where possible.

Bank and building society interest

• From October 2025, HMRC will start issuing simple assessment letters for any tax owed on bank and building society interest earned in the 2024/25 tax year.
• Some individuals may have already received a simple assessment for the 2024/25 tax year that did not include their bank and building society interest. If HMRC subsequently receive information about interest, these individuals may receive a second simple assessment letter for the same tax year which takes this into account.
• Where tax is payable on savings interest, the simple assessment letter will explain how much tax is owed and why. Individuals will then need to pay their tax bill via this link. 

UK tax residence guidance

• To help navigate UK tax obligations, HMRC have created a new collection page for residence guidance to bring together existing guidance on UK residence into one location.
• The new page also includes guidance on changes to non-UK domiciled individuals from 6 April 2025 for:
  • long-term UK residents (former “non-domiciled” individuals);
  • new UK residents, including the conditions that must be met to qualify for the new foreign income and gains (FIG) regime; and
  • employers.