Digital-first approach with less post from HMRC
Expect fewer brown envelopes from HMRC in the coming years as they commit to sending more correspondence digitally. By 2028-29, this shift is expected to save £50 million in print and postage costs each year.
Paper post will still be used for critical items and for those who can’t access digital communications, however, overall, the trend is clear and HMRC is going paper-light.
If you haven’t already done so, we recommend setting up your HMRC online account and using the HMRC app to keep track of notices and reminders.
Changes to the VAT Capital Goods Scheme (CGS)
The CGS helps businesses adjust how much VAT they can reclaim on high-value purchases such as buildings and equipment, depending on how those assets are used over time. However, under upcoming changes:
- Computers will be removed from the list of qualifying CGS assets.
- The CGS threshold for land, buildings, and civil engineering work will increase from £250,000 to £600,000 (excluding VAT).
This is a positive simplification for businesses navigating complex capital projects or mixed taxable / exempt activities.
VAT related to business charity donations
A new consultation is underway looking at how VAT applies when businesses donate goods to charity.
HMRC wants to better understand how goods are donated and distributed, with a view to reducing barriers and red tape, while still preventing abuse of the system.
We’ll be watching this one closely, particularly if your business frequently donates surplus stock or materials.
Delay to payrolling benefits in kind
Employers have been given an extra year to prepare for the mandatory payrolling of benefits in kind, with the start date now set for April 2027 (originally April 2026).
If you’re not already doing so, you’ll eventually need to report and tax employee benefits such as company cars or private medical cover, through your payroll software rather than filing P11D forms at year end.
The delay is welcome, giving more time for employers to update systems, policies, and training. HMRC has also promised to make the process easier to implement when the time comes.
LWA can help you get ahead by exploring voluntary payrolling now, so you’re ready for 2027. Take a look at our recent blog in the meantime, for advice on getting prepared.
Updates to HMRC’s Check Employment Status for Tax (CEST) tool
If you use the CEST tool to determine whether a worker is employed or self-employed for tax purposes, you might notice it looks slightly different. HMRC has made some visual and accessibility updates.
However, the underlying logic remains the same, meaning those grey areas and borderline results still require caution.
If you’re unsure about the result CEST gives you, speak to our tax team or payroll services team for a second opinion before taking action.
Additional highlights from the full Written Ministerial Statement
While many of the headline measures have received attention, the full Written Ministerial Statement includes a wide range of additional updates designed to streamline processes, reduce administrative burdens, and modernise HMRC services. Below are a few more practical highlights that could be relevant to business owners, employers, and individuals managing their own tax affairs. Here’s a summary of some of the other key changes:
- ITSA Reporting Threshold Raised - From within this Parliament, the threshold for Self‑Assessment reporting on trading, property, and ‘other taxable’ income will be increased to £3,000 gross, meaning up to 300,000 additional taxpayers will no longer need to file a Self-Assessment return.
- National Insurance Annual Refund Process Simplified - HMRC will revamp the NIC Annual Maximum rules process to make refunds easier and faster for individuals.
- Voluntary NICsState Pension Forecast Tool Enhancements – Improvements to the “Check Your State Pension” service will encourage and simplify options for paying voluntary NICs to fill gaps in NI records.
- Cultural Gift Scheme Reform – Legislation in next Finance Bill (from April 2026) will remove the “jointly owned objects” restriction and allow more flexible use of tax credits, making the scheme more accessible.
What are all of the changes under the Spring 2025 Written Ministerial Statement?
Many business owners may be feeling overwhelmed with 39 different changes to implement, however please be assured they might not all be relevant to your business. Therefore, we thought it might be helpful to categorise the 39 changes according to whether the rules are being simplified, whether action will be required, or whether changes are being made. Here is the summary:
Simplification (26 items)
- Capital Goods Scheme changes (computers removed, £600k threshold)
- Spirit Drinks Verification Scheme simplification
- Delay to mandatory payrolling of benefits
- Higher ITSA reporting threshold
- Simplified NIC refund process
- Enhanced voluntary NICs State Pension tool
- Clarification of Self-Assessment registration guidance
- Plain‑English HMRC correspondence
- AI‑friendly access to HMRC data for third parties
- Improvements to Customs Temporary Admission
- Customs digitalisation pilots (including with US CBP)
- Transit process modernisation
- Increased Authorisation by Declaration (from 3 to 10 uses/year)
- Post & Parcel Exports new authorisation scheme, export MoU review
Administrative (2 items)
- Border locations to fund and operate their own customs infrastructure
- Consolidation: abolish Valuation Office Agency and bring its functions fully into HMRC — targeted 5–10% efficiency savings by 2028–29
Reform / Consultation (11 items)
- VAT on business donations of goods to charity
- Single remote gambling duty (consultation)
- Soft Drinks Industry Levy reform (consultation)
- Landfill Tax reform (consultation)
- VAT liability changes for online marketplaces (consultation)
- Stamp Taxes on Shares framework modernisation — next steps
- Response to Vaping Duty technical consultation
- HMRC going digital-first — reducing paper post by 2028–29
- Reducing HMRC's central London estate by 25%, moving staff outside London (85% by 2030)
- Consolidation of VOA into HMRC (noted above)
- Investment in HMRC digital services tied to paper‑reduction plans
Help with upcoming changes to tax administration and reforms
To learn more about the complete list of 39 tax changes, visit the gov.uk website here. If you are unsure whether your business will be affected by any of the changes or if you’re feeling overwhelmed at the potential impact on your business, the Corporate Tax Team here at LWA are available to advise.
Give us a call on 0161 905 1801 in our Manchester office or call 01925 830 830 for our Warrington tax team. You can also send us an email to mail@lwaltd.com with ‘Question about the Written Ministerial Statement tax changes’ in the subject field.