28 March 2025
The Spring Statement did not bring a huge amount of change for the payroll profession. There were two items that you may have missed and would be good to be aware of, even if they do not directly impact the payroll process. They were pre-announced, but included in the statement roundup.
The changes are:
High Income Child Benefit Charge (HICBC) changes
From summer 2025, eligible employed individuals who become liable to the HICBC will be able to report their family's Child Benefit payments through a new digital service and pay HICBC directly through PAYE. The HICBC charge itself is not changing.
Customers will be able to check their eligibility for the new service in summer 2025, and some may no longer need to register for Income Tax Self Assessment (ITSA), or file a return.
Increasing late payment penalties percentage rate
From 1 April 2025, HMRC will increase the late payment penalties as part of wider penalty reform.
Penalties will increase from 2% at 15 days, 2% at 30 days and 4% per annum from day 31 to 3% at 15 days, 3% at 30 days and 10% per annum from day 31.
These changes will affect customers who submit VAT returns, and those in ITSA who are part of the trial/voluntary cohort for Making Tax Digital (MTD).
Changes to HICBC may result in more tax code changes than usual, so may be something to consider later in the year once the new process is rolled out.
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