July 2025 Newsletter
HMRC system attack is a timely reminder to keep personal data safe
Taxpayers are being urged to check their online HMRC account after scammers attempted to defraud the tax authority using individuals' data and login details.
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The Low Incomes Tax Reform Group (LITRG) is also reminding people of the importance of being vigilant and taking care of personal data.
HMRC recently announced that criminals had targeted the online tax accounts of nearly 100,000 taxpayers to try to make false tax refund claims.
In some cases, HMRC have said that criminals gained people's login credentials and made use of existing online tax accounts. But, in others, they gained personal data that enabled them to set up new online tax accounts via the Government Gateway.
HMRC have locked down the compromised accounts as a precaution. They are writing to those affected with details on how they can regain access to their accounts.
Joanne Walker, Technical Officer at LITRG, said:
'HMRC have confirmed that they were the victim of online scammers who tried to defraud them of money using the details of individual taxpayers.
While HMRC say this attack has not resulted in any tax-related financial loss for individual taxpayers, it is a timely reminder that fraud is an ongoing threat.'
Source: LITRG Website
Government should take more strategic approach to tax policy, says CIOT
The government should take a more strategic approach to tax policy, consulting earlier and giving greater thought to the design of the tax system, says Nichola Ross Martin, President of the Chartered Institute of Taxation (CIOT).
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In her inaugural speech as CIOT President, Ross Martin said that making a success of MTD will need HMRC and tax professionals to continue to work closely together.
She also promised to continue to press for improvements to HMRC service levels over the year ahead.
The CIOT President also encouraged the government to consider introducing a statutory employment test
In addition, she urged Institute members and employers to feed into a review of the Chartered Tax Adviser (CTA) qualification.
Ms. Ross Martin said:
'While there is plenty of argument about rates and burdens in parliament, there is very little about reform and design.
Take employment taxes. The PAYE system is the government's main breadwinner. Successive governments have tweaked the rates and thresholds for national insurance but paid rather less attention to the fundamental issues as to how tax policy might adapt to cope with the changing world of work.
To pose these questions is not to argue for an 'everything everywhere all at once' approach to tax. But it is to point out that there is more to tax policy than rates and thresholds. Strategy is crucial.'
Source: CIOT Website
HMRC names and shames over 500 employers for failing to pay NLW
HMRC has named and shamed over 500 UK employers for failing to pay the National Living Wage (NLW) or the National Minimum Wage (NMW).
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The employers will now be forced to repay over £7.4 million to nearly 60,000 workers who had been left out of pocket.
Employers who left nearly 60,000 workers over £7.4 million out of pocket must now repay their employees.
The rates for NLW increased to £12.21 an hour on 1 April and the government says this put £1,400 into the pockets of full-time workers on NLW.
Justin Madders, Minister for Employment Rights, said:
'There is no excuse for employers to undercut their workers, and we will continue to name companies who break the law and don't pay their employees what they are owed.
Ensuring workers have the support they need and making sure they receive a fair day's pay for a fair day's work is a key commitment in our Plan for Change. This will put more money in working people's pockets, helping to boost productivity and ending low pay.'
Source: GOV.UK Website
Government introduces Pension Schemes Bill
The government has introduced the Pension Schemes Bill, which it says will make pensions easier to understand and manage as well as drive better value over the long term.
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The bill will work to ensure savers get good returns and drive economic investment by requiring defined contribution (DC) schemes to prove they are value for money to avoid underperforming schemes.
It also aims to simplify retirement choices by all pension schemes offering default routes to a retirement income and consolidate and professionalise the Local Government Pension Scheme (LGPS).
In addition, it will bring together small pension pots worth £1,000 or less into one scheme certified as delivering good value and create new rules for multi-employer DC scheme 'megafunds' of at least £25 billion.
This is so that bigger pension schemes can drive down costs and invest in a wider range of assets and increase flexibility for defined benefit (DB) pension schemes to safely release surplus worth £160 billion, the government said.
Liz Kendall, Work and Pensions Secretary, said:
'Hardworking people across the UK deserve their pensions to work as hard for them as they have worked to save, and our reforms will deliver a huge boost to future generations of pensioners.
The bill is about securing better value for savers' pensions and driving long-term investment in British businesses to boost economic growth in our country.'
Source: GOV.UK Website
Tax gap estimated at 5.3%
The tax gap estimate was 5.3% for the 2023/24 tax year, according to the latest data from HMRC.
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The tax gap is the difference between what tax is expected to be paid and actually paid.
HMRC collected £829.2 billion in the 2023/24 tax year representing 94.7% of all tax due, leaving £46.8 billion unpaid.
However, HMRC revised the figures upwards for 2022/23, from 4.8% (£39.8 billion) to 5.6% (£46.4 billion). It also warned that the latest figures may be revised as more data becomes available.
Some of the key findings from this year's calculations show:
- Small businesses represent the largest proportion of the tax gap (60%).
- Corporation Tax accounts for 40% of the total tax gap.
- Failure to take reasonable care (31%), error (15%) and evasion (14%) are among the main behavioural reasons for the overall tax gap.
Ellen Milner, Director of Public Policy, said:
'These figures show the stubbornness of the tax gap and how optimistic the government's target of a £7.5 billion reduction by 2029/30 is.
While large businesses and wealthy individuals are often accused of not paying enough tax these figures suggest that their total share of the tax gap is not much more than a quarter of that of small businesses.
The small business figures reflect big upward revisions from HMRC a year ago as a result of a random enquiry programme carried out in 2020/21, which identified greater inaccuracy and non-compliance than previously forecast.'
Source: HMRC Press Release, CIOT Website
UK government launches Industrial Strategy
The UK government is aiming to slash energy prices, unlock investment and upskill the workforce in its Industrial Strategy.
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The government says the Industrial Strategy was developed in partnership with business and includes targeted support for the areas of the country and economy that have the greatest potential to grow.
It says it will slash electricity costs by up to 25% from 2027 for electricity-intensive manufacturers in growth sectors and foundational industries in their supply chain.
The government says it will unlock billions in finance for innovative business, especially for SMEs by increasing British Business Bank financial capacity to £25.6 billion.
Finally, it has pledged to upskill the nation with an extra £1.2 billion each year for skills by 2028/29.
Alex Veitch, Director of Policy at the British Chambers of Commerce (BCC), said:
'Attracting and retaining people with the right skills is crucial for business, and a fundamental part of driving economic growth.
We are pleased the government has listened to our calls and put skills at the heart of the Industrial Strategy. The extra cash investment for training in key sectors, such as defence and engineering, has the potential to be a real springboard for growth.
Further action is needed on skills, including more flexibility in the Growth and Skills Levy and a commitment to Local Skills Improvement Plans across England, many of which are successfully led by Chambers.
This week's Industrial Strategy must provide an ambitious long-term plan to drive forward investment and growth through businesses across the UK.'
Source: GOV.UK Website, BCC Website
FCA in international crackdown on unlawful finfluencers
The Financial Conduct Authority (FCA) joined forces with eight international regulators for a week of action to combat the risks of finfluencers on social media.
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Finfluencers are widespread throughout social media platforms. They promote themselves as successful entrepreneurs in luxurious destinations to lure people into paying for their services such as masterclasses to get rich quick and following their investment strategies.
Regulators from the UK, Australia, Canada, Hong Kong, Italy and the United Arab Emirates (UAE) took part in a 'global week of action against unlawful finfluencers' from 2 June.
In the UK, the FCA:
- made three arrests with the support of the City of London Police
- authorised criminal proceedings against three individuals
- invited four finfluencers for interview
- sent seven cease and desist letters
- issued 50 warning alerts.
The FCA says the warning alerts will result in over 650 take down requests on social media platforms and more than 50 websites operated by unauthorised finfluencers.
Steve Smart, Joint Executive Director of Enforcement and Market Oversight at the FCA, said:
'Our message to finfluencers is loud and clear. They must act responsibly and only promote financial products where they are authorised to do so – or face the consequences.'
Source: FCA Website
Latest guidance for employers
HMRC has published the latest issue of the Employer Bulletin.
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The June issue has information on various topics, including:
- PAYE Settlement Agreement calculations 2024 to 2025
- organised labour fraud - the supply of labour through Employment Intermediaries
- mandating the reporting of Benefits in Kind and expenses through payroll software
- Spotlight 68 - using prepaid debit cards for profit extraction to reduce profits and disguise income
- future changes to Statutory Sick Pay
- parents of teens reminded to go online to extend their Child Benefit claim.
Source: GOV.UK Website
