Tag: HMRC

The press release issued by HMRC on 23 June 2026.

High street businesses are set to benefit from action to level the playing field as the government sets out tax and customs reforms.

• High street businesses backed with tax changes that will level the playing field.  
• Government accelerates plans to scrap the duty relief on cheap imports and introduce new controls, supporting fair competition between high street and online retailers. 
• New review into online sellers paying VAT they owe with government using new revenue to improve the business rates system for the high street.
• Package includes plans to reform VAT on sale of land, enabling affordable homes to be delivered quicker. 

High street businesses are set to benefit from action to level the playing field as today (23 June 2026) the government sets out tax and customs reforms to make the system fairer, simpler and digital first.  

To back the high street, the government is bringing forward changes to low value imports by six months in a move that targets cheap imports and puts Britain’s high streets first.  

At Budget 2025, the Chancellor announced the scrapping of customs duty relief on low value imports (LVIs), meaning goods valued at £135 or less will be subject to customs import duties.  

These changes ensure fairer competition between high street and online retailers. The government has since listened to industry and chosen to accelerate delivery of the reforms by six months to October 2028.  

Meanwhile, with high street businesses frequently undercut by online-only sellers who dodge their tax obligations, minsters are reviewing how VAT is collected for businesses trading through online marketplaces.  

They are seeking views on how the current online marketplace rules can be extended to ensure that all businesses comply with UK VAT rules. The revenue raised from this will go towards improvements to the business rates for pubs, restaurants, hotels and other businesses that are the lifeblood of the high street. 

Together, these measures will support fair competition on the high street and online and help make sure that the right tax is collected in a way that better reflects how people buy and sell goods today. 

Dan Tomlinson, Exchequer Secretary to the Treasury, said:  

This action tackles the unfair competition and dodgy businesses that are doing real damage to our high streets.  

And by making sure that tax is paid when its owed, we can raise revenue to put back into improvements to the business rates system for pubs, restaurants, hotels and other high street businesses.

The changes also include a consultation on reforming VAT on land for new social housing, helping speed up delivery of affordable homes. 

The proposal would ensure the tax system better reflects how social housing is developed, focusing VAT relief specifically on land used for delivering social homes while remaining balanced and affordable for taxpayers. 

The plans announced today mark significant progress towards delivering a simpler, more customer-focused, tax and customs system that enables growth, reduces burdens and strengthens fairness across the economy.

The press release issued by HM Revenue and Customs on 8 May 2025.

The Bank of England Monetary Policy Committee announced on 8 May 2025 to reduce the Bank of England base rate to 4.25% from 4.50%.

HMRC interest rates are linked to the Bank of England base rate.

As a consequence of the change in the base rate, HMRC interest rates for late payment and repayment will reduce.

These changes will come into effect on:

• 19 May 2025 for quarterly instalment payments
• 28 May 2025 for non-quarterly instalments payments

Information on the interest rates for payments will be updated shortly.

How HMRC interest rates are set

HMRC interest rates are set in legislation and are linked to the Bank of England base rate.

Late payment interest is currently set at base rate plus 4.00%. Repayment interest is set at base rate minus 1%, with a lower limit – or ‘minimum floor’ – of 0.5%.

The differential between late payment interest and repayment interest is in line with the policy of other tax authorities worldwide and compares favourably with commercial practice for interest charged on loans or overdrafts and interest paid on deposits.

The rate of late payment interest encourages prompt payment and ensures fairness for those who pay their tax on time, while the rate of repayment interest fairly compensates taxpayers for loss of use of their money when they overpay.

The press release issued by HM Revenue and Customs on 22 April 2025.

• Making Tax Digital for Income Tax goes live on 6 April 2026 – supporting the government’s Plan for Change to deliver economic growth
• Eligible taxpayers encouraged to sign up to a testing programme now to get ahead of the changes
• Digital record-keeping will deliver time-saving benefits for taxpayers

There is less than a year to go until sole traders and landlords with an income over £50,000 will be required to use Making Tax Digital (MTD) for Income Tax.

The launch on 6 April 2026 marks a significant and ultimately time-saving change in how these individuals will need to keep digital records and report their income to HM Revenue and Customs (HMRC).

By keeping digital records throughout the year, sole traders and landlords can save hours previously spent gathering information at tax return time – allowing them to spend more time focusing on their business activities and in turn, driving economic growth as part of the government’s Plan for Change.

Quarterly updates will spread the workload more evenly throughout the year, bring the tax system closer to real-time reporting and help businesses stay on top of their finances and avoid the last-minute rush.

James Murray MP, Exchequer Secretary to the Treasury, said:

MTD for Income Tax is an essential part of our plan to transform the UK’s tax system into one that supports economic growth.

By modernising how people manage their tax, we’re helping businesses work more efficiently and productively while ensuring everyone pays their fair share.

This is a crucial step in this government’s decade of national renewal and our Plan for Change, as we clear away barriers that hold back growth.

Craig Ogilvie, HMRC’s Director of Making Tax Digital, said:

MTD for Income Tax is the most significant change to the Self Assessment regime since its introduction in 1997. It will make it easier for self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax.

By signing up to our testing programme now, self-employed people and landlords will be able to familiarise themselves with the new process and access dedicated support from our MTD Customer Support Team, before it becomes compulsory next year.

From April 2026, individuals with qualifying income above £50,000 will need to keep digital records, use MTD-compatible software and submit quarterly summaries of their income and expenses to HMRC. These digital requirements will help businesses save time through more efficient record-keeping, reduce errors in tax calculations, and provide a clearer picture of their tax obligations throughout the year.

Qualifying income includes gross income from self-employment and property before any tax allowances or expenses are deducted. Those with qualifying income above £30,000 will also be required to use MTD for Income Tax from April 2027. The threshold will then decrease to £20,000 from April 2028.

The phased introduction of MTD for Income Tax follows the successful implementation of MTD for VAT, which now helps more than two million businesses reduce errors and save time on their tax affairs. Businesses which joined the MTD for VAT testing phase were better prepared for the move to quarterly reporting.

An independent report published in 2021 found that 69% of mandated businesses experienced at least one benefit from MTD for VAT, while 67% reported that it reduced the potential for mistakes in their record keeping.

Further information

MTD was first introduced for VAT-registered businesses in April 2019, with all qualifying businesses required to join from April 2022.

Penalties for late quarterly updates will not apply during the testing phase, providing an ideal opportunity to get used to the new process without risk.

Around 780,000 self-employed individuals and landlords will be required to use MTD for Income Tax from April 2026, with a further 970,000 joining from April 2027.

More information on MTD for Income Tax

More information on finding compatible software