The government made a significant number of tax announcements on 23 June 2026 under the banner of 'Tax Update 2026: Simplification, Modernisation and Fairness'. With over 40 individual measures, consultations and calls for evidence, it was a busy day on the tax front.
While much of it is still at consultation stage, several announcements are directly relevant to business owners, company directors, sole traders and landlords. Here's a breakdown of the ones most likely to affect you.
HMRC's Tax Update 2026: What It Means for Your Business
The government made a significant number of tax announcements on 23 June 2026 under the banner of 'Tax Update 2026: Simplification, Modernisation and Fairness'. With over 40 individual measures, consultations and calls for evidence, it was a busy day on the tax front.
While much of it is still at consultation stage, several announcements are directly relevant to business owners, company directors, sole traders and landlords. Here's a breakdown of the ones most likely to affect you.
🗓️ Self Assessment: Pay Your Tax Sooner?
One of the bigger proposals is a consultation on making Self Assessment tax payments more timely. At the moment, most Self Assessment taxpayers pay their bill in January and July each year. The government is exploring changing that.
For people who also receive a salary through PAYE, the plan is to collect more of their expected Self Assessment liability in-year through their tax code from April 2029. For other Self Assessment taxpayers, HMRC is looking at reforming the payments on account system.
If you currently file a Self Assessment return for rental income, dividends, or self-employment profits, this could affect when and how you pay your tax in future. The consultation closes on 4 August 2026.
💼 PAYE and VAT: Direct Debit Could Become Mandatory
If you run a business and currently pay your PAYE and VAT liabilities by bank transfer or other methods, you may need to get used to Direct Debit. The government is consulting on making Direct Debit the mandatory payment method for both.
The intention is to make the payment process more consistent and reduce late payment. There are expected to be defined exceptions, so it won't necessarily apply to everyone, but if you're not already set up for Direct Debit payments to HMRC, it's worth keeping an eye on this. The consultation closes on 16 August 2026.
🏢 Company Directors: Distribution Rules Under Review
A consultation has been launched on modernising the rules around company distributions. These are the rules that determine how payments from a company to its shareholders (including dividends, capital returns, and loans) are taxed.
The current rules in some cases date back to 1965, and the government acknowledges they can be complex. Key areas being reviewed include the treatment of capital repayments and new consideration, loans to participators (including from non-UK companies), and the rules around purchase of own shares and demergers.
This one is quite technical, but if you run a limited company and are considering restructuring, returning capital, or making changes to your shareholder arrangements, it is worth being aware that this landscape could change. The consultation closes on 14 September 2026.
📊 R&D Credits: Corporation Tax Quarterly Instalments
From April 2027, Research and Development Expenditure Credits and certain creative industry credits will no longer count towards the profit threshold that determines whether a company must pay Corporation Tax in quarterly instalments.
Currently, receiving these credits can inadvertently push a company into the quarterly instalment payment regime, which requires tax to be paid earlier and in four instalments throughout the year. This change removes that unintended consequence. Good news if your business claims these credits.
💰 HMRC Getting Tougher on Unpaid Debts
One of the more significant compliance measures is a consultation on giving HMRC the power to recover lower-value tax debts directly from taxpayers' bank accounts in regular instalments.
This would only apply where a taxpayer has failed to respond after multiple contact attempts over nine months or more. HMRC says over 750,000 such debts, worth more than £2 billion, go uncollected each year. The proposals include safeguards, but the direction of travel is clear: HMRC wants to be able to collect what is owed without having to go through a lengthy legal process. The consultation closes on 28 August 2026.
📝 IHT Reporting for Trusts: Less Paperwork on the Way
From 6 April 2027, the Inheritance Tax reporting requirements for certain non-taxpaying trusts will be simplified. Some trustees and individuals will no longer need to submit IHT accounts where no tax is actually due.
If you have a trust as part of your estate planning arrangements, this should reduce some of the administrative burden you currently face.
💻 E-Invoicing Update: Peppol Confirmed
The government has confirmed that Peppol will be the core network for e-invoicing in the UK. This is an important step in the roadmap towards a mandatory e-invoicing system, currently expected from 2029.
If you haven't started thinking about what this means for your bookkeeping and accounting software, now is a good time to raise it with us. Most modern cloud accounting platforms are expected to support Peppol, but it is worth checking where your current setup stands.
💳 ISA Changes: Anti-Circumvention Rules Confirmed
Following the Budget 2025 announcement of a lower Cash ISA limit, the government has now confirmed the rules designed to prevent people from working around it. These include a 22% charge on interest earned on cash held within Stocks and Shares or Innovative Finance ISAs, restrictions on transfers from those accounts into Cash ISAs for the under-65s, and a ban on holding 100% Money Market Funds in non-cash ISAs.
If you are making decisions about how to hold your savings or investments, speak to a financial adviser to make sure your arrangements remain appropriate.
What Should You Do Now?
Most of these announcements are still at consultation stage, which means the detail is not yet finalised. But several of them, particularly around Self Assessment payment timings, mandatory Direct Debit, and HMRC debt recovery powers, signal a clear shift in how HMRC intends to operate over the next few years.