Compliance
U.S. and UK Guidance 2025: Thresholds, Car Loans & Automated Tax File Requirements
In late October 2025, both the IRS and HMRC issued key policy changes affecting Form 1099-K thresholds, car loan interest reporting, and evolving filing requirements under UK’s income tax review—vital updates for cross-border professionals and small business owners.
By NomadicTax Research Team • 7 min read • November 22, 2025
## Overview of Recent U.S. Changes (IRS)
From October 2025, several U.S. policy updates took effect that impact both individuals and businesses. Some major changes:
- **1099-K Threshold Reversion**: The dollar reporting threshold under 1099-K has returned to **$20,000** in gross payment volume. Those facilitating digital payments (e.g., payment platforms) must adhere to this limit. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- **Employee Retention Credit (ERC)** Compliance**: New Frequently Asked Questions clarify limitations on credits and refunds for ERC claims, especially relating to improper or late claims for 2021 quarters. Those who claimed after January 31, 2024, for Q3 and Q4 need to pay attention. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- **Car Loan Interest Reporting Relief**: Under the legislation known as the One, Big, Beautiful Bill, businesses facing new information reporting requirements for car loan interest now have transition relief and penalty waiver for 2025. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
### Practical Example U.S.
- If you're a gig-worker receiving digital payments over $20,000 via third-party platforms, that platform must issue Form 1099-K now. But if your income is below that, no 1099-K unless other conditions apply.
- Businesses that made ERC claims late should review whether the IRS’s updated limitations apply to them and possibly amend claims accordingly.
- Lenders reporting car loan interest under the new requirement for 2025 may qualify for penalty relief if they comply in good faith.
## UK Developments: Income Tax Self Assessment Threshold Review & Other Compliance Changes
Alongside U.S. rule changes, the UK’s HMRC has moved forward on several compliance & reporting reforms:
- **Review of ITSA (Income Tax Self Assessment) criteria**: HMRC is assessing whether current filing thresholds and criteria are adequately targeting who must file returns. This includes simplifying criteria around who needs to file and perhaps adjusting thresholds or merging categories. ([gov.uk](https://www.gov.uk/government/consultations/simplifying-and-modernising-hmrcs-income-tax-services-through-the-tax-administration-framework/outcome/simplifying-and-modernising-hmrcs-income-tax-services-through-the-tax-administration-framework-review-summary-of-responses?utm_source=openai))
- **Reforming non-UK domiciled status rules**: As of **6 April 2025**, the UK replaced domicile-based taxation with a **residence-based regime**. Under the new rules, many non-UK domiciled individuals will need to pay UK tax on their worldwide income and gains from that date, while others will be eligible for a four-year foreign income and gains regime. ([gov.uk](https://www.gov.uk/government/publications/tax-changes-for-non-uk-domiciled-individuals/reforming-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai))
### Practical UK Implications
- If you used to be non-UK domiciled but long-resident, plan ahead: starting April 6, 2025, you may be taxed on foreign income you didn’t include before.
- If you now have less complex affairs or minimal outside income, you may qualify to **avoid filing Self Assessment**, pending the outcome of HMRC’s criteria review.
## Actionable Insights: For Global Small Businesses, Digital Nomads & Individuals
1. **Track transaction receipts and reporting thresholds**. In the U.S., revisted thresholds for 1099-K may change how platforms report your income; ensure you keep thorough records.
2. **Recompute payroll and withholding expectations**. Changes in lowest marginal tax rate in Canada and revised reporting in the U.S. may lead to different net pay.
3. **Review your residency and domicile status**. Especially if you split your time among countries like U.K. and U.S., or have foreign income or trusts; new rules may bring formerly off-radar income into taxation.
4. **Voluntary Disclosures and correcting past errors**. As Canada is simplifying its Voluntary Disclosures Program effective October 1, 2025, cross-border taxpayers may find relief if past non-compliance was unintentional. ([canada.ca](https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2025/mistake-on-taxes-changes-voluntary-disclosures-program.html?wbdisable=true&utm_source=openai))
These U.S. and UK developments illustrate that tax authorities globally are tightening reporting, reducing preferential statuses, and enhancing compliance. Staying informed and planning ahead is essential for cross-border professionals, digital nomads, and global entrepreneurs.