By Katie Business News • Tax 0 Comments

VAT and Public Electric Vehicle Charging Points

HMRC has published Revenue and Customs Brief 4 (2026) following a recent First-tier Tribunal (FTT) decision concerning the VAT treatment of electricity supplied at public electric vehicle (EV) charging points.

The case, Charge My Street Ltd v HMRC, found in favour of the taxpayer, concluding that electricity supplied through public EV charging points qualified for the reduced rate of VAT (5%), rather than the standard rate.

However, HMRC has applied for permission to appeal the decision and has confirmed that its position has not changed. It continues to treat electricity supplied at public EV charging points as standard-rated for VAT (20%).

Why is there a difference?

Electricity supplied to domestic premises generally qualifies for the reduced 5% VAT rate.

HMRC’s long-standing view is that public EV charging points are not domestic premises. As a result, electricity supplied through public charging stations remains subject to the standard 20% VAT rate.

What does this mean?

At present, there is still a difference in the VAT charged depending on where an electric vehicle is charged:

• Charging an EV at home is generally subject to 5% VAT.
• Charging an EV at a public charging point remains subject to 20% VAT, in line with HMRC’s current policy.

Although the tribunal ruled in favour of the taxpayer, First-tier Tribunal decisions do not create binding legal precedent. Until any appeal is concluded or HMRC changes its guidance, businesses and charging point operators should continue to follow HMRC’s published policy.

If you have any questions about the VAT treatment of electric vehicle charging or how it could affect your business, please get in touch. A&C Chartered Accountants will be happy to help.

By Katie Business News • Tax 0 Comments

GOV.UK Chat – A New AI Tool for Tax Questions

The government has launched GOV.UK Chat, an Artificial Intelligence (AI) chatbot designed to help people find official government information more quickly. Users can ask questions in plain English and receive instant answers based on guidance published on GOV.UK.

The chatbot can help with a range of tax and financial topics, including:

• Understanding Income Tax
• Calculating Stamp Duty
• Planning for retirement and the State Pension

Since its soft launch in March 2026, thousands of people have used the service, with tax-related questions proving particularly popular.

Use with caution

While GOV.UK Chat can be a useful starting point, it does have limitations. It is important to remember that:

• It only uses information published on GOV.UK.
• It does not access HMRC’s detailed technical manuals or specialist guidance.
• It is primarily designed to answer straightforward questions rather than complex tax issues.

Like any AI tool, its responses are not guaranteed to be accurate. Occasionally, it may provide incomplete information or generate incorrect answers that appear convincing.

Our advice

GOV.UK Chat can be a helpful way to find official guidance quickly, but it should not replace professional advice. To get the most from the tool:

• Use it to help locate information rather than relying on it to make important decisions.
• Read the full response, including any notes or limitations.
• Make sure your question includes all the relevant facts and circumstances.

For straightforward queries, GOV.UK Chat may save you time. However, when it comes to tax planning or decisions that could affect your finances, it’s always worth seeking professional advice.

If you’re unsure how the rules apply to your circumstances, A&C Chartered Accountants is here to help. We’ll ensure you receive advice that’s tailored to your situation and gives you confidence before you act.

By Katie Business News • Tax 0 Comments

Advisory Fuel Rates for Company Cars – June 2026

HMRC has updated its advisory fuel rates for company cars with effect from 1 June 2026. These rates are used when employers reimburse employees for business mileage in a company car or when employees repay the cost of private fuel.

If an employer does not provide fuel for private use, the advisory rates can be used to reimburse business mileage without creating a taxable benefit.

Engine Size Petrol Diesel LPG
1400cc or less 14p (12p) – 11p (10p)
1600cc or less – 15p (12p) –
1401cc to 2000cc 17p (14p) – 13p (12p)
1601cc to 2000cc – 17p (13p) –
Over 2000cc 26p (22p) 23p (18p) 21p (19p)

Previous rates are shown in brackets. Employers may continue to use the previous rates for up to one month after the new rates take effect.

Hybrid vehicles should use the appropriate petrol or diesel rate.

For fully electric vehicles, the advisory rate remains 7p per mile where the vehicle is charged at home and 15p per mile where it is charged using public charging facilities.

Employees Using Their Own Cars

The Approved Mileage Allowance Payment (AMAP) rates for employees using their own vehicle for business journeys increased from 6 April 2026 to:

• 55p per mile for the first 10,000 business miles in the tax year.
• 25p per mile for each business mile over 10,000.
• An additional 5p per mile can be paid for each business passenger carried.

For National Insurance purposes, employers can continue to reimburse at 55p per mile regardless of the total business mileage, as the 10,000-mile threshold does not apply.

VAT Recovery

Where employees are reimbursed using the AMAP rates, employers may be able to reclaim the VAT element relating to the fuel cost, provided they hold a valid VAT receipt from the filling station.

For example, for a diesel company car with an engine size of 1,500cc, the fuel element is 15p per mile, allowing input VAT of 2.5p per mile (15p × 1/6) to be reclaimed.

If you would like advice on mileage claims, company car tax or VAT recovery, please get in touch. A&C Chartered Accountants will be happy to help.

By Katie Making Tax Digital • Tax 0 Comments

MTD for Income Tax: 7 August Deadline Approaching

Making Tax Digital (MTD) for Income Tax is now underway. Most self-employed individuals and landlords with qualifying income of more than £50,000 in the 2024/25 tax year were required to join the new regime from 6 April 2026.

Under MTD, businesses and landlords must keep digital records and submit quarterly updates to HMRC using compatible software. This represents a significant change from the previous system, where most reporting took place after the end of the tax year.

The first quarterly update for the 2026/27 tax year is due by 7 August 2026, so the deadline is now fast approaching.

To ensure your submission is completed accurately and on time, your records should be complete and up to date well before the deadline.

If A&C Chartered Accountants prepares your bookkeeping or submits your quarterly updates, please send us your records as early as possible. Leaving everything until the last minute increases the risk of delays, missing information and errors.

If you’re unsure whether Making Tax Digital applies to you, or you’re not certain what information you need to provide, please get in touch. We’re here to help you stay compliant and avoid any unnecessary stress.

By Katie Business News • Tax 0 Comments

Mandatory Payrolling of Benefits in Kind: Phased Introduction Confirmed

HMRC has confirmed that mandatory payrolling of Benefits in Kind (BiKs) will now be introduced in two phases, beginning on 6 April 2027.

The changes will move the reporting of most employee benefits away from the annual P11D process and into real-time payroll. This means Income Tax and Class 1A National Insurance will be reported through payroll each pay period, whether that is weekly or monthly.

From 6 April 2027

The first phase will apply to:

• Company cars and car fuel
• Vans and van fuel
• Employer-provided medical benefits

From 6 April 2028

Most other taxable benefits will also become subject to mandatory payrolling.

The only exceptions will be:

• Beneficial loans
• Employer-provided living accommodation

These benefits will remain voluntary for payrolling and can continue to be reported using the existing process if preferred.

What does this mean for employers?

Instead of reporting benefits after the end of the tax year using P11Ds, employers will need to include relevant benefits in their payroll submissions throughout the year using Real Time Information (RTI).

Although this will reduce year-end administration, it also means payroll records must be accurate from the outset. Any errors are likely to be identified much sooner and may need to be corrected during the tax year rather than after it has ended.

What should you do now?

Although the new rules do not begin until April 2027, now is a good time to prepare by:

• Reviewing the benefits you currently provide to employees.
• Identifying which benefits will be affected in the first phase.
• Checking that your payroll software and processes will be ready for the changes.

HMRC is continuing to work with payroll software providers and is expected to publish further technical guidance during 2026, with final details anticipated ahead of the Autumn Budget.

This is one of the biggest changes to the taxation and reporting of employee benefits in many years. Planning ahead will help ensure a smooth transition and minimise disruption to your payroll processes.

By Katie Tax 0 Comments

New Rules for Directors: What You Need to Report on Your 2025/26 Self Assessment Tax Return

If you are a director of a limited company in the UK, there is an important change to your Self Assessment tax return this year that you need to know about. HMRC has updated the 2025/26 return to include new mandatory boxes specifically for directors of close companies, and getting it wrong could result in a penalty.

Here is everything you need to know.

What Is a Close Company?

A company is a close company if it is controlled by five or fewer participators, or by any number of participators who are also directors. In practice, this covers the vast majority of owner-managed and family-run businesses in the UK. If you run your own limited company, there is a good chance these new rules apply to you.

What Has Changed?

Previously, a director was only required to tick a box on the SA102 employment page to confirm they were a director and whether the company was a close company. That was it.

From the 2025/26 tax year onwards, that is no longer enough. Directors of close companies now need to complete a separate employment page for each directorship on their Self Assessment return, even where no salary, dividends or other income have been received.

For each directorship, you will need to provide:

  • Whether the company is a close company
  • The company’s name and Companies House registration number
  • The amount of dividends you received from the company during the tax year (even if this is zero)
  • The highest percentage of shares you held at any point during the tax year

What Happens If You Do Not Report It?

HMRC has introduced a new penalty of £60 per omission for failing to provide the required information, applying to Self Assessment returns from 2025/26 onwards. It is worth noting that a white space disclosure listing directorships will not suffice as a workaround. Each directorship needs its own completed employment page.

Why Is HMRC Doing This?

This is not a routine admin update. It is a deliberate push by HMRC to join the dots between ownership, control and profit extraction. HMRC has made no secret of the fact that it considers small businesses to be a significant source of the UK tax gap, and close company dividends are firmly in its sights. Alongside these new return requirements, HMRC has also published a consultation on additional reporting requirements for close companies themselves, which could see companies required to report details of transactions between the business and its shareholders, including loans, dividends, cash withdrawals and asset transfers.

In short, scrutiny of close company dividend arrangements is only going to increase.

What Should You Do Now?

The most important thing is to make sure you have told your accountant about every directorship you hold, including any where you received no income during the year. Beyond that, now is a good time to review whether your dividend procedures are properly documented, commercially justified and fully compliant.

At A&C Chartered Accountants, we work with directors and owner-managed businesses across Manchester to make sure their Self Assessment returns are accurate, complete and submitted on time. If you would like help navigating the new reporting requirements or want to sense-check your dividend procedures, we would love to hear from you.

Book a free consultation today

This article is based on HMRC guidance current as of June 2026. Tax rules can change. Please speak to a qualified accountant before making decisions based on this content.

By Katie Business Advisory • Tax 0 Comments

April 2026 CIS changes: what construction businesses need to know

From 6 April 2026, important changes to the Construction Industry Scheme came into effect. These changes mainly affect contractors who either use subcontractors or have periods where no subcontractors are paid.

Contractors must now either file a CIS return every month, including nil returns, or tell HMRC in advance that they will not be paying subcontractors for that month by submitting an inactivity request. HMRC confirms that penalties may apply where neither action is taken without reasonable excuse.

The full late filing penalty regime has also returned. A late CIS return can trigger a £100 fixed penalty, followed by a £200 penalty after two months. Further penalties may apply at six and twelve months, including tax-geared penalties based on the liability that should have been reported.

There are also tougher rules around fraud and Gross Payment Status. From 6 April 2026, HMRC can remove Gross Payment Status immediately, recover lost tax and charge penalties of up to 30% where a business knew, or should have known, that a payment was connected to fraud.

For construction businesses, the message is simple: every CIS month now needs to be accounted for. Filing nothing is no longer a safe option.

At A&C Chartered Accountants, we help construction businesses stay compliant, avoid unnecessary penalties and keep their CIS records in order. If you are unsure whether you need to file a return or submit an inactivity request, speak to us before the deadline.

By Katie Tax 0 Comments

Loans to Participators (Company Shareholders)

When a close company makes a loan to a participator, most commonly a shareholder, a corporation tax charge can arise if the loan is not repaid within the required timeframe. This is often referred to as a Section 455 or s.455 tax charge.

For loans advanced on or after 6 April 2026, the s.455 tax rate increased to 35.75%, up from the previous rate of 33.75%.

The charge applies where the loan remains outstanding nine months and one day after the end of the company’s accounting period.

However, relief from the s.455 charge can usually be claimed where the loan is:

• repaid
• released
• written off

within that nine month period.

It is important to note that relief cannot be claimed for anticipated future repayments. In practice, this means participators should ensure any outstanding loan balances are cleared before the corporation tax return is submitted wherever possible.

If repayments are made after the return has already been filed, the company may still be able to recover the tax by submitting an amended corporation tax return or making a later claim to HMRC.

For many owner managed businesses, directors’ loan accounts can build up gradually over time, particularly where funds are withdrawn informally throughout the year. Monitoring balances regularly can help avoid unexpected corporation tax charges and cash flow issues.

At A&C Chartered Accountants, we help businesses review participator loan accounts proactively so potential s.455 issues can be identified early and managed efficiently.

By Katie Business News • Tax 0 Comments

SDLT and mixed use property: why classification matters

When buying property in England, Stamp Duty Land Tax (SDLT) can be a significant cost. One important distinction is whether a property is treated as purely residential or as mixed use.

A mixed use property includes both residential and non residential elements. This could include a house with farmland, commercial buildings or land used for a genuine non residential purpose. Mixed use properties are subject to lower SDLT rates than residential properties, which can result in substantial tax savings.

However, HMRC continues to closely scrutinise claims for mixed use treatment.

This was highlighted in the recent case of HMRC v Christopher Brzezicki. Mr Brzezicki purchased a large house together with a fishing stream and an island and argued that the transaction qualified as mixed use. Although the First tier Tribunal initially agreed, the Upper Tribunal overturned the decision and ruled that the entire property was residential.

The Tribunal found that the stream and island formed part of the property’s “grounds” and were therefore residential in nature, rather than genuinely non residential land. While trout bred naturally in the stream, there was no active commercial operation in place at the time of purchase.

The decision is a useful reminder that unusual features such as woodland, streams, paddocks or separate parcels of land will not automatically qualify a property for mixed use SDLT treatment. The key consideration is how the land is actually being used and whether it would ordinarily be regarded as part of the home.

For buyers, getting the classification wrong can lead to unexpected tax liabilities, interest and penalties if HMRC successfully challenges the SDLT position.

At A&C Chartered Accountants, we can help review property transactions, assess whether mixed use treatment is appropriate and ensure SDLT claims are properly supported before completion.

By Katie Business Advisory • Business News • Tax 0 Comments

What Qualifies for Capital Allowances?

In Orsted West of Duddon Sands (UK) Limited & Ors v HMRC, the Supreme Court considered whether significant pre-construction costs could qualify for capital allowances tax relief.

The case centred on offshore windfarm projects where the companies incurred substantial expenditure on environmental surveys, seabed investigations and technical studies before any turbines were constructed. The companies argued that these costs were an essential part of creating bespoke assets and should therefore qualify for capital allowances.

HMRC disagreed, and the Supreme Court ultimately sided with HMRC.

The decision focused on a key piece of legislation stating that capital allowances are only available for expenditure incurred “on the provision of plant or machinery”.

The judges concluded that this requires a direct and close connection to the physical asset itself. Although the surveys and investigations were necessary for deciding whether and how the windfarms could be built, they were considered preparatory in nature. They helped place Orsted in a position to construct the assets, but they were not part of providing the plant or machinery itself.

While this case involved offshore windfarms, the implications are much wider.

Many businesses incur significant costs before acquiring or constructing long term assets, including:

• feasibility studies
• design and planning work
• professional fees
• environmental or regulatory assessments

Following this decision, these types of costs are less likely to qualify for capital allowances unless they are closely linked to the acquisition, construction or installation of the qualifying asset itself.

For businesses planning major investment projects, this is an important reminder not to assume that all upfront project costs will attract tax relief.

At A&C Chartered Accountants, we recommend reviewing expenditure carefully as projects progress, separating early stage exploratory costs from spending directly connected to the asset. Getting this distinction right from the outset can help avoid unexpected tax liabilities later.

By Katie Business News • Tax 0 Comments

VAT on public electric vehicle charging: tribunal challenges HMRC position

A recent VAT case has raised important questions around the correct VAT treatment of public electric vehicle charging.

In Charge My Street Ltd v HMRC [2026], the First-tier Tribunal concluded that supplies of electric vehicle charging at public charging stations could qualify for the reduced rate of VAT at 5%. This contrasts with HMRC’s long-standing position that such supplies should be subject to the standard rate of 20%.

Charge My Street Ltd operated electric vehicle charging points in public locations across the North of England. The company applied the reduced 5% VAT rate on the basis that its supplies fell within the rules for domestic fuel and power.

Under VAT legislation, supplies of electricity for domestic use can qualify for the reduced rate, provided certain conditions are met. One key provision is the ‘de minimis’ rule, which treats supplies of electricity below 1,000 kWh per month as domestic.

The Tribunal found that where charging was supplied to individual users, the level of electricity consumption fell below this threshold. As a result, those supplies qualified for the reduced rate.

This decision challenges the long-standing disparity between VAT treatment for electric vehicle charging at home, which benefits from the reduced rate, and charging at public stations, which has typically been standard-rated.

However, it is important to note that this is a First-tier Tribunal decision and does not set binding precedent. It is widely expected that HMRC will appeal the ruling, and the position may evolve further as the case progresses.

A complex and evolving area of VAT

This case highlights the complexity of VAT, particularly where legislation intersects with emerging technologies and changing consumer behaviour. The correct VAT treatment will depend on the specific facts of each supply, including how the electricity is delivered and measured.

At A&C Chartered Accountants, we are monitoring developments in this area closely. Businesses involved in electric vehicle infrastructure, or those uncertain about the VAT treatment of their supplies, should ensure their approach is robust and well-supported.

If you would like to review your VAT position or discuss how these developments may affect your business, we would be happy to assist.

By Katie Business News • Tax 0 Comments

Dividends: increased scrutiny and new reporting requirements

Recent developments indicate a clear shift in HMRC’s approach to monitoring dividends and transactions between companies and their shareholders. With new consultations and expanded data collection, there is a growing focus on transparency and compliance for close companies.

New consultation: reporting company payments to participators

A new consultation, Reporting company payments to participators, has been published, seeking views on proposals to introduce enhanced reporting requirements for close companies.

The government’s position is that the risk of error and tax non-compliance is higher in close companies, where the distinction between the company and its participators can become blurred. HMRC has identified that it does not currently have full visibility over how these companies interact with their shareholders.

Under the proposed framework, close companies may be required to report detailed information to HMRC on transactions with participators, including:

  • payments made by cash, bank transfer or other means
  • loan repayments and loan write-offs
  • sales of assets to the company
  • purchases of assets from the company
  • dividends and other distributions
  • any other transfer of value from the company to the participator

Salary and wage payments are expected to remain outside the scope of these requirements, as they are already captured through PAYE reporting systems.

If implemented, these proposals would represent a significant increase in reporting obligations and HMRC oversight.

Expanded dividend reporting through self-assessment

In addition to the consultation, Finance Act 2024 introduced powers allowing HMRC to collect more detailed information through self-assessment tax returns.

From the 2025/26 tax year onwards, company directors will be required to disclose additional information, including:

  • whether they were a director of a company
  • whether the company was a close company
  • the company’s name and registration number
  • the amount of dividends received from the close company during the tax year
  • the highest percentage shareholding held during the tax year

This enhanced reporting framework provides HMRC with greater insight into the relationship between directors, shareholders and their companies, particularly in relation to dividend extraction.

A clear direction of travel

Taken together, these developments point to a more data-driven and compliance-focused approach from HMRC. With increased access to information on dividends and participator transactions, discrepancies are more likely to be identified.

For business owners operating through limited companies, it is increasingly important that dividend procedures are robust, properly documented and aligned with both company law and tax legislation.

By Katie Business News • Tax 0 Comments

What the 2026/27 tax year means for your business: key changes to plan for now

Each new tax year introduces a range of updates, and while some thresholds remain unchanged for 2026/27, a number of targeted changes will have a direct impact on business owners and shareholders. Understanding these developments early allows for more effective planning and informed decision-making.

Income tax: higher dividend tax rates

Income tax thresholds remain broadly aligned with the 2025/26 tax year. The personal allowance continues at £12,570, and the basic rate band remains at £37,700.

The principal change is an increase in the rates applied to dividend income from 6 April 2026. Dividends within the basic rate band will be taxed at 10.75%, increased from 8.75%. Dividends within the higher rate band will be taxed at 35.75%, increased from 33.75%. The additional rate remains unchanged at 39.35%.

This adjustment increases the overall tax cost for individuals who extract profits via dividends, particularly owner-managed businesses where dividends form a key part of remuneration.

Corporation tax: increased compliance costs and charges

Two notable changes take effect in relation to corporation tax.

The section 455 tax charge, which applies to loans made by close companies to participators that remain outstanding nine months and one day after the end of the accounting period, will increase to 35.75% for loans and advances made on or after 6 April 2026. This aligns the charge with the higher dividend rate.

In addition, revised penalties will apply to late-filed corporation tax returns where the filing deadline falls on or after 1 April 2026. The updated penalty structure is as follows:

  • £200 for missing the filing deadline
  • £400 where the return is three months late
  • £1,000 for a third consecutive failure to file on time
  • £2,000 where the return is three months late for a third consecutive failure

These changes represent a more stringent approach to compliance and increase the financial consequences of late filing.

Capital gains tax: higher rates on qualifying disposals

The rate of capital gains tax applicable to gains qualifying for Business Asset Disposal Relief and Investors’ Relief will increase to 18% from 6 April 2026. This follows the increase to 14% introduced in April 2025.

The continued upward movement in these rates increases the tax cost associated with qualifying business disposals and investment exits.

VAT: relief for donations of business goods

From 1 April 2026, a new VAT relief will apply to certain donations of business goods to charities. Where the relevant conditions are met, these donations will no longer be treated as a deemed supply for VAT purposes.

The relief is subject to specific eligibility criteria, including value limits and exclusions for certain categories of goods.

Summary

Although many headline thresholds remain unchanged, the 2026/27 tax year introduces a series of focused changes that increase tax exposure in key areas, particularly for company owners and investors. Higher dividend tax rates, increased section 455 charges, enhanced penalties for late filing, and rising capital gains tax rates all contribute to a more demanding tax environment.

At A&C Chartered Accountants, we support clients in navigating these changes with clarity and confidence, ensuring that tax positions are managed proactively and aligned with wider business objectives.

By Katie Business Advisory • Tax 0 Comments

Sourcing Labour from Third Parties? Due Diligence Required

A final reminder for any businesses that source workers through third parties, such as agencies or umbrella companies. New rules will come into effect from 6 April 2026 that could have significant tax implications.

Under the new legislation, businesses may become jointly and severally liable for PAYE and National Insurance contributions relating to workers supplied through these arrangements if the third party fails to meet its tax obligations to HMRC.

This means that if an agency or umbrella company in the labour supply chain does not correctly account for PAYE or NIC, HMRC may seek to recover the unpaid amounts from other parties involved in the arrangement, including the end client.

Given the potential financial exposure, it is important for businesses that rely on outsourced labour to review their current arrangements and understand how the new rules may apply.

Carrying out appropriate due diligence on labour providers and understanding how workers are engaged within the supply chain will be essential to reduce the risk of unexpected tax liabilities.

If your business regularly engages workers through agencies or umbrella companies, it would be sensible to review these arrangements before the new rules take effect in April 2026. We would be happy to help you assess your current position and ensure your processes are compliant.

Need more information?

At A&C Chartered Accountants, we’re not just accountants; we’re your partners in success. Based in Manchester, our experienced team handles everything from managing limited company and sole trader accounts to expertly navigating tax returns. Beyond financials, we play a crucial role in driving your business’s growth, strategically steering it towards success with confidence and clarity.

CONTACT US TODAY

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By Katie Business Advisory • Tax 0 Comments

Employer-Provided Vehicles and Taxable Benefits in Kind

As we approach the new tax year, it is worth remembering that the flat-rate figures used in calculating certain employer-provided vehicle benefits will increase in line with inflation from 6 April 2026.

The updated figures are as follows:

  • The flat-rate van benefit charge will increase from £4,020 to £4,170.

  • The flat-rate van fuel benefit charge will increase from £769 to £798.

  • The multiplier used to calculate the car fuel benefit charge will increase from £28,200 to £29,200.

Where an employer provides a company car to an employee or director, this will normally be treated as a taxable benefit in kind. The amount of the benefit depends on several factors, including the vehicle’s power source, the manufacturer’s list price and its CO₂ emissions. A reduction may apply for any period during the year when the vehicle is unavailable for use.

Pool Cars

Cars that are owned by the business and used by multiple employees may qualify as pool cars. Where the conditions are met, this can mean no benefit in kind arises.

However, strict rules apply. To qualify as a pool car:

  • the vehicle must be used by more than one employee

  • it must not normally be kept overnight at any employee’s home

  • private use must be very limited or purely incidental to business travel

If these conditions are not genuinely met in practice, the vehicle may be treated as a company car for tax purposes.

A Recent Tax Tribunal Reminder

The importance of applying the rules correctly was highlighted in a recent tax tribunal case, MWL International Ltd and Maywal Ltd v HMRC [2026].

In this case, a company had treated several vehicles as pool cars for more than 20 years and had not reported any benefit in kind. The approach had originally been discussed informally with HMRC many years earlier.

However, during a later PAYE audit, HMRC concluded that the vehicles did not actually meet the conditions required to qualify as pool cars. As a result, significant National Insurance liabilities arose.

The company challenged HMRC’s position, but the Upper Tribunal ruled that HMRC was entitled to apply the correct tax treatment, regardless of any previous informal understanding.

The case serves as a useful reminder that company vehicles must genuinely meet the pool car conditions in practice, not just in theory. Informal agreements or historic arrangements with HMRC do not provide long-term protection if the rules are not being properly followed.

If you would like to review how company vehicles are currently being treated within your business, we would be happy to help ensure everything is structured in the most tax-efficient and compliant way.

Need more information?

At A&C Chartered Accountants, we’re not just accountants; we’re your partners in success. Based in Manchester, our experienced team handles everything from managing limited company and sole trader accounts to expertly navigating tax returns. Beyond financials, we play a crucial role in driving your business’s growth, strategically steering it towards success with confidence and clarity.

CONTACT US TODAY

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By Katie Business Advisory • Tax 0 Comments

Advisory Fuel Rates for Company Cars from 1 March 2026

HMRC has published the latest advisory fuel rates for company cars, which apply from 1 March 2026.

These rates represent the suggested reimbursement amounts for employees who use a company car for private mileage. Where an employer does not pay for any fuel for the company car, these are the amounts that can be reimbursed for business journeys without creating a taxable benefit for the employee.

For this quarter, the petrol, diesel and home charging rates remain unchanged. However, the LPG rate and the public electric charging rate have been updated.

The new rates per mile are as follows:

Engine size (N/A for fully electric cars)

Petrol
1400cc or less – 12p (previously 12p)
1401cc to 2000cc – 14p (previously 14p)
Over 2000cc – 22p (previously 22p)

Diesel
1600cc or less – 12p (previously 12p)
1601cc to 2000cc – 13p (previously 13p)
Over 2000cc – 18p (previously 18p)

LPG
1400cc or less – 10p (previously 11p)
1401cc to 2000cc – 12p (previously 13p)
Over 2000cc – 19p (previously 21p)

Electric vehicles (fully electric only)

Home charging – 7p per mile (previously 7p)
Public charging – 15p per mile (previously 14p)

For hybrid vehicles, the petrol or diesel rate must be used rather than the electric rate.

Employers may continue to use the previous advisory fuel rates until 31 March 2026.

Employees Using Their Own Cars

Where employees use their own cars for business journeys, the Advisory Mileage Allowance Payment (AMAP) rates remain unchanged.

Employees can be reimbursed:

45p per mile for the first 10,000 business miles in a tax year
25p per mile for any additional business miles

An additional 5p per mile may be paid for each passenger carried on a business journey.

Input VAT

Within the 45p and 25p AMAP rates, a portion relates to the fuel element. Employers can reclaim input VAT on this fuel component, provided the claim is supported by a valid VAT invoice from the filling station.

For example, for a 1300cc petrol car, the fuel element is 12p per mile. This means the employer can reclaim 20/120 of that amount, which equates to 2p per mile as input VAT.

By Katie Business Advisory • Tax 0 Comments

Overpayment Relief From HMRC

If you have paid too much tax, perhaps because of an error on a tax return or because you believe an amount assessed by HMRC was incorrect, there are ways to reclaim the overpaid tax.

As a general rule, claims for refunds cannot be made more than four years after the end of the relevant tax year. For example, a claim relating to the 2021/22 tax year would need to be made by 5 April 2026.

However, in certain circumstances it may be possible to reclaim overpaid tax through a process known as overpayment relief. This involves making a formal claim to HMRC and acts as an important safeguard for taxpayers.

HMRC has recently updated its guidance to help individuals submit successful claims. Any claim for overpayment relief must be made in writing and must clearly state:

  • that the claim is for overpayment relief

  • the tax year in which too much tax was paid or assessed

  • the reason why too much tax was paid or assessed

  • the amount believed to have been overpaid or over-assessed

  • whether an appeal has previously been made in relation to the same payment or assessment (the term “appeal” must be used)

The claim must also include a declaration confirming that the information provided is correct and complete to the best of the claimant’s knowledge and belief, and it must be signed personally.

It is important to follow the correct process when making a claim. If you believe you may have paid too much tax in previous years, we would be pleased to assist you in reviewing the position and preparing a claim where appropriate.

Need more information?

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By Katie Business Advisory • Tax 0 Comments

Making Tax Digital for Income Tax – Time Is Ticking

We are continuing to work with a number of our clients as they prepare for Making Tax Digital (MTD) for Income Tax. This new regime will apply from April 2026 to self-employed individuals and landlords whose business and/or property income (that is, total takings rather than profit) exceeds £50,000 per year.

Under the new system, individuals will be required to keep digital records and submit quarterly updates to HMRC. The first quarterly update will be due by 7 August 2026.

HMRC recently confirmed that around 860,000 individuals will be brought into the regime from April 2026. They are encouraging taxpayers to begin preparing now and are emphasising the benefits of spreading tax administration across the year, rather than leaving everything until the annual tax return deadline.

If you fall within the group affected from April 2026, it is important to remember that the normal Self Assessment process will still apply for the current tax year. Your tax return for the year ended 5 April 2026 must still be submitted by 31 January 2027.

This means that during the 2026/27 tax year you will be providing HMRC with quarterly updates under MTD, while also completing your final traditional tax return for 2025/26.

If we are not already working with you to plan your transition into this new digital regime, please do get in touch and we will be happy to support you.

By Katie Business Advisory • Tax 0 Comments

Spring Forecast 2026: What the OBR’s outlook could mean for tax planning

During a week dominated by news from the Middle East, the Chancellor, Rachel Reeves, presented the government’s Spring Forecast to Parliament on 3 March 2026.

The Chancellor told MPs that economic stability had been restored, pointing to the latest projections from the Office for Budget Responsibility.

While the government focused on signs of economic growth, particularly when measured by GDP per person, the OBR’s report paints a more complex picture. It suggests that the fiscal environment remains tight and that the next Budget will take place against a challenging backdrop.

As part of the government’s policy to hold only one major fiscal event each year, the Spring Forecast included no new tax or spending announcements. However, the updated forecasts provide useful signals about where future tax pressures may emerge.

A steadily rising tax burden

One of the clearest messages from the OBR’s projections is that the overall tax burden is expected to continue rising.

Taxes are forecast to reach 38.5% of GDP by 2030/31, which would represent the highest level since the Second World War.

A major driver of this increase is the continued freeze on income tax thresholds, which is currently scheduled to remain in place until April 2031. As wages rise over time, more people will be pushed into higher tax brackets even if their real financial position has not changed.

This phenomenon, often described as fiscal drag, means that many individuals and business owners may find themselves paying higher levels of tax without any formal rate increases being introduced.

The state pension and income tax

Another interesting point raised in the forecast relates to the state pension.

From 2027/28, the full state pension is expected to exceed the personal allowance. This could potentially bring around 600,000 more people into the income tax system by 2026/27, rising to approximately one million by 2030/31.

The government has stated that it does not intend for pensioners whose only income is the basic or new state pension to pay income tax during this Parliament. However, the detailed policy explaining how this will work in practice has not yet been confirmed.

National insurance and hiring pressures

The OBR also notes that the increase in employer national insurance contributions, introduced last April, is contributing to the higher tax take.

For businesses, this increase in employment costs may influence hiring decisions. At the same time, the OBR forecasts that unemployment could rise to around 5.3% in 2026 before gradually falling back to 4.1% by 2030.

For many employers, the combination of higher payroll costs and economic uncertainty may encourage a more cautious approach to recruitment.

Self assessment and international tax changes

Self assessment payments are expected to increase significantly during the 2026/27 tax year.

Part of this rise is linked to the abolition of the UK’s non-domiciled tax regime in 2025/26, alongside a temporary facility that allows certain overseas income to be brought back to the UK.

Anyone with overseas income, assets or international financial arrangements should review their position carefully, as these changes may have a meaningful impact on future tax liabilities.

Capital taxes and investment planning

The OBR also expects receipts from capital taxes to rise.

Strong performance in UK equity markets has increased the value of many portfolios, which means more investors could be facing capital gains tax when they sell assets.

If you hold UK shares or other investments, this may be an appropriate time to review your portfolio and consider whether crystallising gains, rebalancing holdings or making use of available allowances could improve your tax position.

Any such planning needs to take account of anti-avoidance rules such as the ‘bed and breakfasting’ rules, which restrict the immediate repurchase of assets after they have been sold.

Why proactive tax planning matters more than ever

Taken together, the OBR’s report suggests that tax planning will become increasingly important over the coming years.

For individuals and business owners alike, this means:

  • monitoring available allowances carefully

  • thinking about the timing of income, gains and dividends

  • making sure reliefs are fully utilised

  • reviewing pension contributions and investment structures

  • considering how assets are held within a family

Small adjustments made early can often make a meaningful difference to future tax liabilities.

As the tax landscape continues to evolve, taking a proactive approach to financial planning will be key to keeping tax bills under control while maintaining long-term financial stability.

By Katie Business Advisory • Tax 0 Comments

A Practical Tax Planning Guide Before 5 April 2026

Effective tax planning is about timing, structure and using allowances before they’re lost. The following areas should be reviewed well ahead of the 5 April 2026 tax year end.

Income tax & allowances

  • Maximise use of the personal allowance (£12,570) and basic rate band across family members where income splitting is commercially justified

  • Use the dividend allowance (£500) and personal savings allowance (£1,000 for basic rate taxpayers, £500 for higher rate taxpayers) before year end

  • Consider the timing of bonuses and discretionary income, particularly where income is approaching £100,000 (personal allowance withdrawal) or £125,140

  • Accelerate or defer income receipts based on expected tax rates and personal circumstances in 2026/27

Capital gains tax planning

  • Use the annual exempt amount (£3,000 per individual) before 5 April 2026 — losses cannot be carried back

  • Consider bed-and-breakfasting alternatives, such as ISA reinvestment or spouse transfers, to refresh CGT base costs

  • Review disposals where Business Asset Disposal Relief may apply (lifetime limit £1 million, taxed at 14%, subject to qualifying conditions)

  • Crystallise capital losses before year end to offset current or future gains (losses carry forward indefinitely but current year losses must be used first)

  • For residential property disposals, note CGT rates of 18% or 24% and the 60-day reporting and payment requirement

Pension contributions

  • Maximise pension contributions up to the £60,000 annual allowance and use carry-forward relief from the previous three tax years

  • High earners with adjusted income over £260,000 should review the tapered annual allowance, which can reduce to £10,000

  • Employer pension contributions avoid employer NICs (now 15%) and remain deductible for corporation tax

  • Review exposure to the money purchase annual allowance (£10,000) if pension benefits have already been accessed

Tax-efficient investments

  • Use ISA allowances (£20,000 per individual) and Junior ISA allowances (£9,000 per child) — unused allowances cannot be carried forward

  • Consider venture capital schemes where appropriate:

    • SEIS: up to £200,000 at 50% income tax relief

    • EIS: up to £1m (£2m for knowledge-intensive companies) at 30% relief

    • VCTs: up to £200,000 at 30% relief

  • Review availability of loss relief on EIS and SEIS investments, which can be set against income as well as gains

Corporate planning for directors and companies

  • Review the optimal mix of salary and dividends, particularly following the increase in employer NICs to 15% from April 2025

  • Consider timing of capital expenditure to maximise relief under the £1m Annual Investment Allowance or full expensing rules

  • Review group relief opportunities where companies have differing year ends

  • Monitor director loan accounts — balances over £10,000 can trigger benefit-in-kind charges, and outstanding loans may attract a 33.75% s455 charge

Inheritance tax planning

  • Use the annual gifting exemption (£3,000, plus prior year if unused) and small gifts exemption (£250 per recipient)

  • Structure regular gifts from surplus income to qualify for immediate exemption, ensuring appropriate records are kept

  • Consider potentially exempt transfers now to start the seven-year clock

  • Review Business Property Relief and Agricultural Property Relief eligibility and ownership periods

  • Check life assurance policies are written in trust where appropriate

Property & SDLT considerations

  • Review property portfolios for potential disposals ahead of future tax changes

  • Consider incorporation of property businesses, balancing SDLT costs (including the 3% surcharge) against long-term corporation tax savings

Cross-tax and administrative planning

  • Review salary sacrifice arrangements for pensions, childcare and cycle-to-work schemes

  • Time charitable donations to maximise Gift Aid relief

  • Review VAT schemes (flat rate, cash accounting or annual accounting) where relevant

  • Check HMRC coding notices and payments on account

  • Ensure self-assessment obligations are planned for ahead of the 31 January 2027 deadline

By Katie Business News • Tax 0 Comments

Inheritance tax reliefs – a welcome U-turn for family businesses and farms

If you own a business or agricultural land, the last few months have probably felt unsettled. The proposed changes to Inheritance Tax (IHT) reliefs created real concern for many family businesses and farming families who rely on Agricultural Property Relief (APR) and Business Property Relief (BPR) to pass assets down the generations.

There is now some much-needed good news.

What has changed?

The government has confirmed that the cap on 100% relief for APR and BPR – due to take effect from 6 April 2026 – will be increased from £1 million to £2.5 million per individual.

In practical terms, this means you will be able to pass on up to £2.5 million of qualifying business or agricultural assets free from IHT from that date. Anything above this amount will still attract IHT, but at least the starting point is now significantly more generous than originally proposed.

A second important improvement

This is not the only positive adjustment.

When the reforms were first announced in the 2024 Autumn Budget, the new £1 million allowance was not going to be transferable between spouses or civil partners. That would have limited family planning options and, in many cases, increased the eventual tax bill.

The government reversed this position in the 2025 Autumn Budget, confirming that the allowance will be transferable between spouses and civil partners.

What does this mean for you?

Taken together, these changes mean that couples could potentially pass on up to £5 million of qualifying agricultural and business assets free of IHT from April 2026.

For many family-owned businesses and farms, this is a significant relief and removes a lot of the immediate pressure that followed the original proposals.

What should you do now?

This is a welcome development, but it does not mean planning is no longer needed. The rules around what qualifies for APR and BPR can be complex, and ownership structures, wills, and succession plans still need to be reviewed.

By Katie Business News • Tax 0 Comments

MTD for Income Tax – nearly there

If you complete a Self Assessment tax return, you’ve probably been hearing about Making Tax Digital (MTD) for what feels like a long time. The change is now very real, and the first wave of taxpayers will be brought into the regime from 6 April 2026.

In other words, MTD for Income Tax is no longer something “for the future” – it is just around the corner.

Who does this affect?

From 6 April 2026, MTD for Income Tax will become mandatory for a significant number of Self Assessment taxpayers.

You are likely to be within scope if, in the 2024/25 tax year, your combined turnover from your sole trade and/or property business was more than £50,000.

If you fall into this category, you will need to keep digital records and submit income and expense information to HMRC using compatible software, rather than relying solely on your traditional annual tax return.

Further groups of taxpayers will then be brought into MTD in 2027 and 2028, so this is a change that will eventually affect many more people.

What does this mean in practice?

For those within scope, MTD will mean:

  • keeping digital records for your business or property income

  • using MTD-compatible software

  • sending regular updates to HMRC throughout the year, rather than just once at year end

For some business owners and landlords, this will feel like a big shift in how their tax affairs are managed.

You don’t have to do this alone

Over the past year, A&C Chartered Accountants has already been helping many clients prepare for MTD, testing systems, and getting processes in place so the transition is as smooth as possible.

By Katie Business News • Tax 0 Comments

Employment expenses – important change to working from home relief

Many employees have relied on tax relief for the costs of working from home since the pandemic. However, the rules are changing, and it is worth understanding what this means for you before the next tax year begins.

What is changing?

From 6 April 2026, employees will no longer be able to claim tax relief against their employment income for the costs of working from home.

The government is making this change because a large number of claims have been made incorrectly in recent years. As a result, the long-standing relief is being withdrawn for most employees from 2026/27 onwards.

What applies for 2025/26?

The good news is that the relief is still available for the current tax year.

For 2025/26, you can still claim:

  • £6 per week without needing to provide evidence of actual costs, or

  • a higher amount if you can demonstrate your actual additional homeworking expenses.

However, this is only available if you are contractually required to work from home. If you choose to work from home but your employer does not require it, the relief will not be available.

What will this cost employees?

From 2026/27, the removal of this relief will typically increase Income Tax by:

  • £62 per year for basic rate taxpayers, and

  • £124 per year for higher rate taxpayers.

While these amounts may not seem large, they are still worth factoring into your personal tax position.

What about employer reimbursements?

There is an important exception.

From 2026/27, if your employer reimburses you for the costs of working from home, those payments can be made free of Income Tax and National Insurance, provided you are contractually required to work from home.

This means employers may need to review their policies if they want to continue supporting homeworking employees without creating a tax charge.

What should you do now?

If you currently claim working from home relief, it is sensible to check whether you are contractually required to work from home and to consider how this change will affect you from April 2026.

If you are an employer, you may want to review your employment contracts and reimbursement arrangements to ensure they remain tax-efficient.

By Katie Business News • Tax 0 Comments

There’s still time to take control of your year-end tax planning

With the tax and financial year end fast approaching on 5 April 2026, now is the moment to make sure you are not leaving money on the table. A little planning now can make a real difference to your tax position, your cash flow, and your longer-term financial security.

At A&C Chartered Accountants, we help start-ups, owner-managers and small businesses make smart, timely decisions so you keep more of what you earn. Below are the key areas to consider before the year end.

Savings – making your money work harder

If you have spare cash, one of the simplest and most effective moves is to use your ISA allowance.

For 2025/26, you can invest up to £20,000 per person in ISAs, sheltering that money from income tax and capital gains tax.

If you are aged between 18 and 39, a Lifetime ISA could also be worth considering. You can contribute up to £4,000 per year, and the government adds a 25% bonus, up to £1,000 annually. This can be used towards your first home or for retirement. It is important to note that the Lifetime ISA limit sits within your overall £20,000 ISA allowance.

We can help you decide which option makes most sense for your goals.

Pension planning – one of the most powerful tax tools available

If you can, increasing your pension contributions before 5 April 2026 is often a very tax-efficient move.

At a basic level, for every £4,000 you contribute to a personal pension, the government tops this up to £5,000 through basic rate tax relief.

If you pay higher rate tax, you can claim an additional £1,000 in your tax return, reducing the real cost of that £5,000 contribution to £3,000.

Pensions become even more valuable if your income sits between £100,000 and £125,140. In this band, your personal allowance is gradually withdrawn, which can result in an effective 60% marginal tax rate. Making pension contributions can reduce your taxable income and help you avoid or reduce this charge.

There are annual limits on how much you can contribute tax efficiently, and timing matters. A&C Chartered Accountants can review your position and help you get this right.

Dividends and company loans – act before rates rise

From 6 April 2026, dividend tax rates are increasing by two percentage points.

This means:

  • Basic rate dividends will rise from 8.75% to 10.75%

  • Higher rate dividends will rise from 33.75% to 35.75%

  • The additional rate will remain at 39.35%

The higher rate increase will also apply to the ‘penalty tax’ charged on certain company loans to shareholders made on or after 6 April 2026.

If you are a company director or shareholder, it is worth reviewing the timing of dividends and any planned company loans before the year end to benefit from the lower 2025/26 rates where appropriate.

We can model the numbers for you and recommend the most tax-efficient approach.

Capital allowances – timing your business investment

If your business has a year end of 31 March or 5 April, the tax year end is especially important for capital allowances.

To qualify for allowances in your current period, assets must be purchased and brought into use before your accounting year end.

Key points to know:

  • The Annual Investment Allowance (AIA) lets both companies and sole traders write off 100% of the first £1 million spent on qualifying plant and machinery in a 12-month period. This excludes cars, although new zero-emission cars can qualify for 100% relief.

  • Limited companies can also benefit from “full expensing” on most new (not second-hand) equipment, with no overall spending cap.

  • From 1 January 2026, a new 40% first-year allowance is available on certain qualifying assets, which may be particularly useful for unincorporated businesses that have already used their full £1 million AIA.

If you are buying equipment on hire purchase, you can still claim allowances on the full cost of the asset, provided it is in use by your year end.

Getting the timing right can make a big difference to your tax bill, and we can help you plan this properly.

Capital Gains Tax – use your allowance while you can

Everyone has a £3,000 Capital Gains Tax annual exemption for 2025/26. If you have not used it, you may want to consider realising gains before 6 April 2026.

There are also further increases coming to the rates for Business Asset Disposal Relief (BADR) and Investors’ Relief. These rose from 10% to 14% in April 2025 and will increase again to 18% from 6 April 2026.

If you are planning a qualifying disposal, bringing this forward could save you tax.

Voluntary National Insurance – protecting your state pension

To receive the full new State Pension, you generally need 35 qualifying years of National Insurance Contributions.

If you have gaps in your record, you can usually fill these by paying Class 3 voluntary NICs at £17.75 per week (£18.40 in 2026/27).

You can normally only make payments for the previous six tax years, which means gaps for 2019/20 must usually be filled by 5 April 2026.

If you are unsure about your record, we can help you check whether topping up makes financial sense for you.

Year-end tax planning is not about rushing into decisions – it is about making informed, well-timed choices that suit your circumstances.