Tax Matters Digest

Tax Matters Digest: 12 June 2025 Edition

To go straight to the articles in the latest edition please scroll down to the section/s below that are of interest to you. For a preview of these articles, read the introduction to the latest edition from Sharon Baynham here:

As I am writing this introduction the Chancellor is preparing to report the outcome of the 2025 Spending Review; by the time you read this that report will have happened. The Spending Review will set planned day-to-day spending totals for all government departments for the years 2026/27 to 2028/29 as well as investment spending plans for a further year (until 2029/30). The media have been covering the departmental negotiations that have been going on behind closed doors for weeks and there is a lot of speculation over who the winners and losers will be.

We are not expecting any specific tax announcements but there are a few things to keep an eye on which are below, and of course the outcome of the Spending Review is likely to heighten speculation over the summer regarding tax rises in the Budget later this year. There is a sense of déjà vu to all of this:

Sharon Baynham

Director, Tax Policy

��㣨Leyu�� in the UK

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We are expecting more details of the HMRC Transformation Roadmap following confirmation of Phase Two of the Spending Review. The Roadmap is expected to bring together strategic and transformation ambitions for HMRC to be a digital first organisation. At a joint ICAEW and CIOT event in March 2025, James Murray MP, Exchequer Secretary to HM Treasury made a number of announcements giving some insight into what we might see in the Roadmap. This included the use of voice biometrics to strengthen security and safeguard customer data when taxpayers call HMRC, as well as reducing call times. It also included participation in a new digital pilot with the US to test ways to speed up trade processes for US and UK business (it remains to be seen how recent tariff developments might impact on that). As I'm writing the exact timing of the Roadmap is unclear, but linking the report to the Spending Review indicates that when announced the Roadmap will have agreed funding. We will report developments in our future issues of Tax Matters Digest; and
The Government had intended to publish its new industrial strategy alongside the Spending Review, as well as its infrastructure strategy. However, the House of Commons background briefing mentions recent reporting from the Financial Times that the infrastructure strategy will now be published in the week following the Spending Review, with the industrial strategy following it in the final week of June.

In the meantime, many people will recall that reform of carried interest was a flagship policy in the Government’s manifesto. Last year a call for evidence was issued on the subject and, on 5 June 2025, a response document and policy update was published. There are a number of key developments and our spotlight article this week brings you up to date. Draft legislation is expected by 21 July 2025 which will form part of Finance Bill 2025-26 and be effective from April 2026.

The next article reminds readers that the deadline for 2024/25 share plan reporting is fast approaching. Returns must be submitted by 6 July 2025 and the article gives pointers on where to prioritise your efforts in preparing for the deadline.

We then have a second article from our employment taxes team which focusses on non-compliance with the national minimum wage. Employers will already know that the rules are complex and can produce unexpected results. It is easy to get it wrong no matter how good your intentions are. Our article highlights the common errors.

Our final article from our employment taxes team asks what employers can take away from recently published HMRC research that looked at employers�� attitudes towards salary sacrifice for pensions and how attitudes were affected by hypothetical changes to reduce the tax and NIC reliefs available. The publication does not mean that the Government are looking to change the treatment of pension salary sacrifice but that is unlikely to stop speculation that these arrangements might be targeted if taxes do go up in the autumn.

We close out this edition with a few favourites. Firstly, we link to column in Tax Journal. In Other News In Brief we include updates on Pillar Two guidance and the Scottish Building Safety Levy, ��㣨Leyu��’s latest European Economic Outlook and the release by the OECD of consolidated text in relation to the Common Reporting Standard. To finish we include our Indirect Tax Talking Points and our round-up of news from our member firms in Week in Tax.