Tax (General)

NI, tax avoidance, and relief

Special tax site NICs relief (workplace postcode)

From April 2025, Freeport or Investment Zone NIC category letters will require additional data to be reported accurately. This is still going ahead, so keep an eye out for further development.

If a qualifying employee is reported under these categories, but the workplace postcode is missing from the Full Payment Submission (FPS), it will be rejected by HMRC.

This update is part of the government’s initiative to boost economic activity in designated special tax sites, such as Freeports and Investment Zones.

By linking NIC reliefs directly to workplace postcodes within these zones, the government ensures that tax incentives are applied accurately and only benefit eligible employees working in these areas.

Continuing the move to Payrolling Benefits

Changes are on the horizon as HMRC mandates the payrolling of most benefits in kind through payroll software from April 2026. However, employment-related loans and accommodation will remain reportable through P11D and P11D(b) forms for now, with a timeline for mandating these benefits to follow at a later date.

This shift means reporting and paying Income Tax and Class 1A National Insurance Contributions (NICs) in real-time through payroll software and the end to P11Ds being submitted once a year.

HMRC has been looking to make this mandatory since introducing the payrolling benefits and has been on quite the journey to get to this point. The move to only accepting P11Ds online seems it has been part of the strategy to get employers accustomed to completing this task digitally and is serving as a stepping stone to ensure the change is less drastic.

This change is ultimately likely to be here before we know it, so start preparing now by voluntarily transitioning to payrolling benefits where you can. This will ensure you stay on track for full integration by April 2026, whilst also helping employees get used to the new real-time reporting and pay process.

HMRC has been working with stakeholders in the industry and reaching out to the software developers to gain feedback. They will be looking to pull together this feedback and the results to produce the guidance needed well ahead of payrolling benefits becoming mandatory in 2026.