Since 2019, MTD for VAT has been mandatory for all VAT-registered businesses above the £85,000 threshold, including voluntary registrants.

From April 2026, MTD applies to sole traders and landlords earning over £50,000. Those thresholds will fall further: £30,000 from April 2027 and then £20,000 from April 2028.

HMRC faces a significant challenge persuading smaller businesses and landlords to adopt digital record-keeping and quarterly reporting. The slow registration rate suggests many affected taxpayers may not be prepared for the upcoming mandatory deadlines. For now, customers who miss this deadline will be sent a reminder letter with no penalties for the 2026/27 tax year.

HMRC repaid £44.1m between January and March, with 13,942 approved claims processed in that period. The average repayment exceeded £3,160, up nearly 10% from the previous year.

Emergency tax codes remain the core problem. When they are applied to initial flexible withdrawals, they then continue to cause unexpected and excessive deductions for retirees, taxing the withdrawal as if it were monthly income for the rest of the tax year.

Experts have highlighted a shift in the issue – while fewer people may be affected, those who are caught by the system are losing larger sums up front. The government’s plan to make pensions subject to inheritance tax could push more people to withdraw large lump sums which may increase emergency tax incidents even further.

HMRC has announced an overhaul of emergency pension tax processes, promising faster refunds, but higher-rate charges will still occur.

The Winter Fuel Payment (£200 – £300 depending on age) was paid to everyone, but around two million pensioners who earned above £35,000 must now repay it via tax adjustments.

Pensioners will receive a letter or HMRC app notification when their tax code changes. HMRC will review tax paid versus tax due, and if the full amount cannot be collected, they will issue a tax calculation afterwards.

HMRC will automatically reclaim the payment by adjusting PAYE tax codes for affected pensioners, unless they file Self-Assessment returns. Pensioners cannot repay early; they must wait for HMRC to collect it through future tax codes.

Repayment will occur in the 2026 – 27 tax year, recovering the payment made in 2025 – 26. As an example: a £200 payment will mean roughly £17 extra tax per month until repaid.

HMRC says most repayments will be handled automatically through tax codes, while Self-Assessment users will repay via their tax return.

It still includes a 25% government bonus but will be paid only at the point of buying a property, not annually. There will be no 25% withdrawal penalty if funds are used for non-property purposes. The controversial £450,000 property price cap remains unchanged, despite rising house prices, and the Treasury suggests it is still appropriate.

As had been alluded to previously, HMRC has confirmed that it will tax all interest earned on cash held within a Stocks & Shares ISA at 22%. This closes the long-standing loophole where savers could hold cash inside an investment ISA and still receive tax-free interest.

Investors will no longer be able to hold 100% of a Stocks & Shares ISA in money market funds, which behave similarly to cash.

To be eligible, you must be a business or public body and do less than half your work in the public sector. You can also be a charity or employ a care/support worker. Since April 2025, if your company pays more than £100,000 in Class 1 NI, you can claim. However, you cannot claim if your company only has one director, and they are the only employee liable for secondary Class 1 NI.

You make the claim through your payroll software by stating “yes” in the Employment Allowance indicator field on your Employment Payment Summary (EPS) submission. If successful, HMRC will reduce your Class 1 NI liability once you’ve run your payroll each month, until the £10,500 (or the amount you were eligible for) is used up or the tax year ends (whichever comes sooner).

The Chancellor made this announcement recently and the change has been backdated to 6 April 2026. This is the first increase since 2011 and applies to employees and self-employed workers using their own car or van for work. You cannot claim separately for fuel, tax, MOT, repairs, etc. – the mileage rate is meant to cover all running costs.

If your employer pays less than 55p, you can claim tax relief on the difference (for example, employer only pays 30p, so you claim tax relief on 25p). If your employer pays nothing, you can claim tax relief on the full 55p. Claims are made via HMRC or a self-assessment tax return.

This measure will only last over the summer holidays (25^th June until 1^st September) and is intended to give families “a bit of breathing room to enjoy moments that matter without the same level of financial strain”, according to the Prime Minister, Kier Starmer. It will cost the Government around £300m but is hoped to stimulate spending in the UK’s visitor attraction sector, giving a much-needed boost to the economy.

Formal enquiries are triggered when HMRC believes an IHT return may be incomplete or inaccurate. HMRC can demand documents, valuations, and explanations from families or accountants during these checks. However, only 40% of last year’s checks resulted in amendments, down from 45% the previous year. Still, IHT receipts hit a record £8.5bn last year.

Frozen IHT thresholds, combined with rising property values and inflation, mean more estates are being pulled into the tax net each year. This will increase further in 2027, when pensions are added to the value of estates.

VCTs are listed funds that invest in young, unquoted companies. They are a crucial source of capital for early-stage businesses. They have raised £4.3bn in the last five years, according to HMRC. Past beneficiaries include Graze, Virgin Wines, and Zoopla.

The annual VCT investment limit has doubled to £10m, intending to help companies scale beyond the start-up phase. But cutting the tax relief at the same time is seen as contradictory – “giving with one hand and taking with the other.” The last time VCT relief was cut – from 40% to 30% in 2006 – fundraising dropped by two-thirds year-on-year. Wealthier investors may redirect their money elsewhere, for example EIS/SEIS (offering 30-50% relief), pensions or mainstream equity income funds.

Estates above the nil rate band will face a 40% IHT charge. It is believed that 10,500 estates will pay IHT for the first time and 38,500 estates will see higher bills, averaging £34,000 extra. However, this change will only see a move from 5% to 8% of all estates paying IHT.

Despite this, research shows widespread anxiety with 54% of adults fearing their families will face higher IHT and 22% now feeling less confident about their pensions. People are already reacting to the impending change, with savers withdrawing £3.9bn in lump sums in the year after the announcement – £868m more than the previous year. One in seven are spending more of their pension; nearly half plan to. Other things to consider, if you feel your family will now receive an IHT bill, is to exchange your pension for an annuity (these are normally outside the scope of IHT) or use the gifting rules to reduce your estate’s overall value.

Please get in touch to discuss your options if you feel this rule change is going to affect you.