UK updates PAYE rules: HMRC replaces Inland Revenue

Small wording changes in law can matter more than they look. Today, the House of Commons received a technical update to the PAYE rules. The instrument is SI 2025/1144: the Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2025. It was made on 30 October 2025, laid on 3 November 2025, and takes effect on 24 November 2025. The text is published on legislation.gov.uk.

In plain English, the regulations tidy up who ‘the Inland Revenue’ is in the PAYE Regulations 2003. Where the rules previously treated ‘Inland Revenue’ as an officer of the old Board of Inland Revenue, they will now read ‘HMRC’. Because HMRC is the department (covering Commissioners as well as officers), this clarifies that Commissioners can carry out some functions that used to sit only with officers. A linked tweak updates regulation 198(1) on unauthorised electronic communication so it simply refers to HMRC rather than repeating outdated titles.

Before we go further, a quick reminder of what a Statutory Instrument is. Parliament makes Acts that set the big framework for an area of law, and departments use SIs - pieces of secondary legislation - to update or fine‑tune the detailed rules. They are publicly available on the UK legislation website and are part of routine parliamentary scrutiny.

Here’s where PAYE fits in. Under the Income Tax (Earnings and Pensions) Act 2003, employers deduct income tax from employees’ pay and send it to HMRC. The PAYE Regulations 2003 set out the day‑to‑day mechanics for how that happens, including definitions and how information is sent to the department.

Why change the words now? The Inland Revenue merged with Customs & Excise in 2005 to form HMRC, but some older regulations still use ‘Inland Revenue’. Updating the definition to ‘HMRC’ brings the text into line with how the tax authority is structured today and avoids readers having to translate legacy language.

Who does what inside HMRC matters when the law assigns functions. The previous wording anchored certain tasks to ‘officers’. By confirming that ‘HMRC’ - which includes the Commissioners - can perform those tasks, the change clarifies responsibility at senior level as well as on the front line. Two of HMRC’s Commissioners, Angela MacDonald and Jonathan Athow, signed the instrument on 30 October 2025.

The small fix to regulation 198(1) is about digital submissions. That provision concerns the use of electronic methods that HMRC has not authorised. The amendment removes references to the defunct ‘Board of Inland Revenue’ so the rule now points cleanly to HMRC, reducing duplication and potential confusion for anyone reading the law alongside guidance.

What should you do if you run payroll or build payroll software? In practice, nothing about tax rates, codes or take‑home pay changes because of this SI. HMRC has not issued a Tax Information and Impact Note, which signals that there’s no substantive policy shift here. Stay aware that future guidance, forms and system messages may use the updated wording.

Why we’re covering this: it’s a teachable example of legal literacy. A short definition change can widen who is legally able to act, streamline decision‑making and tidy the statute book. When you read official documents, looking closely at definitions - and who they empower - is a useful habit we can all build.

If you want to check the primary source, search for Statutory Instrument 2025/1144 on legislation.gov.uk. Keep the key dates in view: made on 30 October 2025, laid before the House of Commons on 3 November 2025, and in force from 24 November 2025. If you’re responsible for payroll, simply keep your software current and follow HMRC guidance as usual.