Andrew McQueen
On 21 July 2025, also known as ‘Legislation Day’, HM Treasury released a batch of draft laws and tax updates. These changes fall into three main areas:
- Closing the tax gap
The government wants to reduce tax avoidance and make the system more accurate. Key proposals include:
- Requiring tax agents (people who deal with HMRC for others) to register with HMRC.
- Expanding Making Tax Digital for Income Tax, which is meant to cut down on errors.
- Creating a fairer, more sustainable tax system
These proposals aim to rebalance who pays what, but some are controversial. They include:
- Reducing how much Inheritance Tax relief people can claim on farms and businesses from April 2026.
- Including inherited pension pots in a person’s estate for Inheritance Tax from April 2027.
- Treating Employee Car Ownership Schemes more like company cars for tax purposes.
- Keeping the tax system up to date
The final batch of proposals focus on updates and clarifications:
- A change to help limit the rise in company car tax for plug-in hybrids (PHEVs) if new vehicle emissions standards (Euro 6e) are introduced.
- New guidance on PISCES – a planned private stock market that will let private companies trade their shares from time to time. The guidance covers how this might be taxed.