Essential updates for employers: Summer 2025

Improvements to HMRC digital services for PAYE   

A new roadmap published by HMRC on 21st July 2025 outlines plans to streamline and minimise phone calls and paper administration by improving HMRC’s online services, over the next five years. HMRC are aiming to make their app and web pages the first port of call for taxpayers and their advisers to reduce phone waiting times and save postage costs, which they estimate to be £50 million per year. 

The first phase of improvements to the PAYE service during the 2025/2026 year include plans for:  

• A new online service for all PAYE customers, enabling customers to make changes to reported income, and to verify tax payments, allowances and deductions. 
• A new expenses service so PAYE customers can submit claims for tax relief on their allowable expenses and upload supporting evidence. 

Followed by subsequent improvements, including: 

• Adding explanations and reassurance messages for customers e.g. confirming that changes have been made or documents have been attached. 
• New reporting service so customers with simple tax affairs can report their taxable income to HMRC easily. 
• Expanding digital options for National Insurance Contributions (NICs) refunds to make it easier and faster for customers to access their refunds  
• New service to allow agents to digitally submit information impacting their client’s tax code. 

There are also plans to improve the digital services for Self Assessment, VAT, Child Benefit, Customs, Corporation Tax, Inheritance Tax and Services for Agents.  While these promised changes to modernise will take some time to implement, it may signal a light at the end of the tunnel for those who still spend hours on the phone to HMRC. 

Apprenticeship funding changes 

From January 2026, Level 7 apprenticeship funding will only be available to apprentices aged 21 and under. Announced in the Autumn Budget 2024, this change will have significant impact on those studying higher level professional qualifications and their employers. 

Funding is currently available to all learners who are studying a level 7 apprenticeship – equivalent to a master's degree – however, soon anyone aged 22 or over will have to seek employer funding for the qualifications. Care leavers and those with an Education, Health and Care Plan can receive Government funding up to age 25. 

Anyone already studying a Level 7 apprenticeship qualification or enrolled before January 2026 will not be affected. If you are considering taking on a Level 7 apprentice above the age of 21, enrol them before the deadline to ensure access to funding. 

Changes to Statutory Sick Pay (SSP) 

The UK Government recently published the Roadmap for Implementing the Employment Rights Bill, announcing changes to Statutory Sick Pay (SSP) that will impact employers from April 2026.  

The first confirmed change is the removal of the waiting period before SSP is payable. Currently employees must be absent for three working days in a row before employees are eligible to receive payments of SSP. This restriction will be removed, meaning all eligible employees will receive SSP from day 1 of their sick leave. 

The second confirmed change is the removal of the Lower Earnings Limit from determining whether an employee is eligible to receive SSP. This now means more employees will be able to access SSP when they are sick. Employees will be entitled to 80% of their average weekly rate, or the current SSP rate of £118.75 – whichever is lower.  

The Deputy Prime Minister estimates this could mean 1.3 million people will now be eligible to receive SSP for the first time due to this expansion of eligibility criteria. 

Seasonal workers – holiday pay and pension duties 

Many employers throughout the UK employ seasonal workers, from seaside cafes to agricultural farm pickers. It is important that employers are aware of their obligations to their seasonal workers, even though they may only employ them for a short period of time. 

Auto-enrolment obligations may apply to any employees aged 22 or over and earning more than £833 per month. Employers have the option to postpone workers for up to 3 months, so if seasonal workers are employed any longer than this, employers may need to enrol them into their pension scheme and pay contributions on their behalf. 

Seasonal and temporary workers are also entitled to holiday pay and leave, despite only being with the employer for a short while and often working part-time too. Employers will need to calculate holiday entitlements and pay this to their employees when needed, including any remaining pay owing to them at the end of their employment. 

Last updated 12 Aug 2025 | First published 12 Aug 2025

Share

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

---