New tax administration measures, low value import rules under review and new international rules to cut legal costs for UK businesses
Today’s blog post places a focus on new rules relating to tax, imports and international legislation aiming to cut legal costs for UK businesses. If these affect you or your business, read on to find out more!
Raft of tax administration measures announced: How will these affect businesses and employers?
James Murray, the Exchequer Secretary to the Treasury, made a Written Ministerial Statement recently which included a number of tax simplification, administration and reform measures. In total, 39 measures were announced.
Many measures are intended to reduce burdens on employers and small businesses, whereas others are designed to modernise H M Revenue & Customs (HMRC) systems and processes.
Here are five highlights included among the measures announced.
1. Delay to payrolling benefits
Mandatory payrolling of benefits in kind will now be delayed to April 2027 instead of April 2026.
Payrolling benefits is a way to report and tax employee benefits through the payroll system, rather than submitting them at the end of the tax year via form P11D. Currently, employers can voluntarily choose to payroll benefits, however the government intends for this to become mandatory.
Delaying the introduction of mandatory payrolling of benefits will give employers more time to prepare. In addition, HMRC will work to make sure that the new requirements are easy for employers to implement.
2. Simplification to Capital Goods Scheme
The VAT Capital Goods Scheme (CGS) makes you adjust how much VAT you can reclaim on expensive items like buildings or equipment if how you use them changes over time – especially if you move between taxable and exempt activities.
While no date has been mentioned yet, new legislation will be put forward to remove computers from the assets covered by the scheme. The capital expenditure value of land, buildings and civil engineering work at which CGS begins to apply will be increased to £600,000 (excl. VAT) from its current level of £250,000 (excl. VAT).
This will be a welcome simplification for affected businesses.
3. Updates to Check Employment Status for Tax (CEST) Digital Tool
HMRC is making this tool easier to use, and updates to the tool may have been made by the time you are reading this.
These are accessibility changes only though. How the CEST tool works out if a worker is self-employed or employed is not being changed.
This is unfortunate as there are occasions where the determination the CEST arrives at is not necessarily accurate. If you would like a second opinion about the results of a check you have carried out, please contact us and we would be happy to help you.
4. VAT Treatment of Business Donations of Goods to Charity
The government is to begin a consultation on the VAT treatment of business donations of goods to charity.
The consultation will look at what types of goods are donated, how they are distributed, and if there is scope to make adjustments that will balance preventing tax evasion with avoiding burdensome administration requirements.
The consultation is available to view here.
5. Less paper in the post
HMRC is aiming to reduce the amount of paper correspondence it sends out, and use digital formats instead. It expects to be able to save £50 million in print and postage costs annually by the 2028-29 tax year.
Therefore, we should begin to see fewer letters from HMRC arriving in the post as they make use of online methods. Certain critical correspondence will continue to be sent by paper post, and promises have been made not to abandon those who are unable to access correspondence by digital means.
If you are affected by these or any other measures announced in the Tax Update Spring 2025 announcement, please call us and we will be happy to help you understand how your personal situation is affected and what you need to do.
To review the Exchequer Secretary’s statement in full, please see: https://questions-statements.parliament.uk/written-statements/detail/2025-04-28/hcws607
Low Value Import Rules Under Review – What It Could Mean for Small Importers and E-Commerce Sellers
The government has announced a formal review of the UK’s Low Value Imports regime, which currently allows goods worth £135 or less to be imported without paying customs duties. The review comes in response to concerns from some large UK retailers, who argue that the current system gives an unfair advantage to overseas sellers.
For small businesses that rely on cross-border e-commerce, drop-shipping, or fulfilment centres based outside the UK, this review could lead to significant changes in how goods are taxed at the border.
What’s Being Reviewed?
The existing system was designed to simplify trade and reduce admin costs, particularly for lower-value items. It’s widely used by:
- Online sellers sourcing products from international suppliers.
- Drop-shipping businesses shipping goods directly to customers.
- Small retailers importing goods in low volumes.
However, large domestic retailers like Next and Sainsbury’s have argued that this setup disadvantages UK-based sellers who must charge VAT and, in some cases, pay tariffs on similar goods.
In response, the Chancellor announced that the Low Value Imports regime will be reviewed, with stakeholder engagement beginning next month. According to the government, the review will consider:
- The impact on UK consumers, including any changes in pricing or availability of goods.
- Administrative complexity, especially for smaller importers.
- Fairness and competitiveness for UK-based and international sellers.
- The need to support innovation and flexibility in online retail models.
Why It Matters for Smaller Businesses
For many SMEs and independent e-commerce businesses, the low value threshold helps keep costs down and margins sustainable. Changing the rules could mean higher import costs, more paperwork, or even reduced access to overseas suppliers.
That said, the government has signalled it will aim to strike a balance – ensuring fairness for all types of businesses without placing unnecessary burdens on those who rely on efficient global supply chains.
What’s Next?
The Low Value Imports review will launch in the coming weeks, with decisions likely to follow later this year. No changes have been confirmed yet, and any reform will need to take into account both business impact and consumer outcomes.
We’ll continue to track the consultation and share updates as they become available.
International business can open up many opportunities, even for small businesses. If you need any help or advice on import taxes please get in touch. We would be happy to help you.
New International Rules to Cut Legal Costs for UK Businesses
From 1 July 2025, UK businesses involved in cross-border disputes will benefit from a major change in how their legal judgments are recognised overseas, thanks to new international rules being introduced under the 2019 Hague Convention.
The UK has officially signed up to the Convention, which means that if a UK court makes a judgment in a civil or commercial case involving a business in another participating country, that decision will be far easier to enforce abroad. As a result, businesses should save time, money, and legal uncertainty.
What’s Changing?
Currently, even when a UK business wins a case in a UK court, getting that judgment recognised and enforced in another country can be complex and slow. In some cases, it can even lead to near-identical legal proceedings starting all over again in the foreign country.
Under the new rules:
- UK civil and commercial court judgments will be recognised and enforced automatically in other countries that have signed the Hague 2019 Convention.
- The same will apply in reverse – judgments from participating countries will be recognised in UK courts.
- This will apply to proceedings that begin on or after 1 July 2025.
Why It Matters for Business
For UK companies trading internationally, particularly SMEs, this change could reduce the cost and complexity of resolving disputes across borders. Instead of navigating multiple legal systems, businesses will have one consistent set of rules that simplify enforcement.
It also makes the UK more attractive as a base for resolving disputes, reinforcing the reputation of UK courts and legal professionals in the global legal market.
The Convention is already in use by 29 countries including EU member states, Ukraine, and Uruguay, with more expected to join in the future.
Looking Ahead
Businesses involved in regular cross-border activity – especially those drafting contracts or managing overseas disputes – should be aware of the upcoming changes.