Legislation Day 2025 - What Was Published?

On ‘Legislation Day’ (21 July 2025), HM Treasury released a range of draft legislation and tax documents. The key measures to be implemented by the new legislation can be categorised into the following areas:

CLOSING THE TAX GAP

Several measures are proposed that will target tax avoidance. In addition, tax agents will be required to register with HMRC in order to deal with HMRC on their customers’ behalf.

One of HMRC’s main reasons for introducing Making Tax Digital (MTD) for Income Tax is that it will supposedly reduce errors. MTD is covered in more detail in the article below.

PUTTING THE TAX SYSTEM ON A FAIRER, MORE SUSTAINABLE FOOTING

Key measures in this category include:

• The controversial restrictions on the amounts of inheritance tax relief available for agricultural and business property from April 2026 (see below);

• Proposals to include inherited pension pots in a deceased person’s estate for inheritance tax purposes from April 2027; and

• Proposals to bring Employee Car Ownership Schemes into scope of the benefit in kind rules as company cars

MAINTAINING THE TAX SYSTEM

Key measures in this category include:

• A proposal to introduce an easement that will help to mitigate the significant increase in benefit in kind (BiK) for plug-in hybrid electric vehicles (PHEVs) following a potential introduction of the new Euro 6e standard. If the standard is introduced in Great Britain, it would significantly increase the BiK tax due on PHEV company cars, which is linked to CO2 emissions.

• Technical guidance that aims to provide clarity on the tax implications of PISCES. PISCES stands for “Private Intermittent Securities and Capital Exchange System”, which is a new type of stock market that will allow private companies to have their shares traded intermittently.