An estimated one million taxpayers missed the self assessment deadline for the 2024/25 tax year, according to HMRC.

Over 11.48 million taxpayers filed their self assessment tax returns before midnight on 31 January.

However, more than 12 million self assessment taxpayers were expected to file a tax return and pay any tax owed by the deadline.

HMRC says that anyone who needs to file a return and missed the deadline should meet their tax obligations as soon as possible, as late filing and late payment penalties are charged.

The tax authority said that 97.25% of tax returns were filed online with 475,722 taxpayers waiting until the final day to file their return.

On 31 January, 27,456 people submitted their returns in the final hour while the busiest hour for submitting a return was 17:00 to 17:59, when 32,982 people filed.

HMRC advisers handled 5,409 webchats and 10,483 calls to the helplines which, unusually, were opened on a Saturday to provide extra support to taxpayers on deadline day.

Myrtle Lloyd, HMRC's Chief Customer Officer, said:

'Thank you to the millions of people and agents who filed their self assessment tax return and paid any tax owed by 31 January.

'HMRC digital channels are always the quickest and easiest way for people to sort their tax affairs.'

Internet link: HMRC

The number of people using the HMRC app to pay their self assessment tax bill has increased by 65% this tax year, according to the tax authority.

Almost 340,000 people have used the HMRC app to pay their self assessment tax since 6 April 2025, an increase of 132,788 people compared to the same period last year, says HMRC.

Self assessment taxpayers need to file their tax return online for the 2024/25 tax year and pay any tax owed by 31 January 2026. HMRC is encouraging those yet to start theirs, to go to GOV.UK and do it now. Anyone who misses the deadline could be subject to an automatic £100 penalty.

HMRC says that filing tax returns ahead of the deadline means knowing how much tax to pay sooner.

The tax authority says it is quick and easy to pay via the HMRC app and set up payment reminders to make sure the deadline is not missed.

Myrtle Lloyd, HMRC's Chief Customer Officer, said:

'The self assessment deadline is less than one month away, and thousands of people have already paid their tax bill via the HMRC app. It is quick and easy to do, and you can also see your payment history. Search 'download the HMRC app' on GOV.UK to access the app and make your self assessment payment.'

Internet link: HMRC

The introduction of Making Tax Digital (MTD) for Income Tax this April will be the biggest change to the UK's tax system since self assessment, says the Low Incomes Tax Reform Group (LITRG).

From 6th April 2026, taxpayers with more than £50,000 of gross income from self-employment and/or rental income in the 2024/25 tax year will need to comply with the new rules from that date.

Unless they are exempt, taxpayers who meet the income threshold will be required to follow these new rules, which will include keeping digital records, submitting quarterly updates of their income and expenses, and filing an annual tax return using commercial software.

According to HMRC's data, more than 200,000 unrepresented taxpayers will be required to follow the new rules.

The LITRG has published new guidance to help taxpayers navigate the change.

Victoria Todd, Head of LITRG, said:

'MTD is the biggest tax change since self assessment and with just over two months to go, time is running out to get ready.

'Many taxpayers will have the support of a tax adviser or accountant to guide them through the process. But for those who can't afford professional tax advice, the new rules may seem confusing and the requirements daunting.

'We want to make it as easy as possible for taxpayers to understand whether the rules apply to them and what they need to do if that is the case.'

The lending commitment is one of the largest collective moves by the banking sector in over a decade. The government says this represents an 'historic show of confidence in the UK economy'. 

Senior executives from NatWest, HSBC UK, Barclays, Lloyds and Santander finalised an agreement with the government on 26 January at a roundtable in Westminster convened by the Business Secretary and the CEO of UK Export Finance Tim Reid. 

Combined, the banks serve half of all British businesses across all corners of the country.  

Peter Kyle, the UK's Business Secretary, said:

'Strengthening Britain's export potential relies on British businesses having the means, motive, and opportunity to succeed in new overseas markets.

'The £11 billion these banks are making available will help meet the ambitions of smaller British businesses to fully export, expand and exploit these international market opportunities. It is positive proof of UK lenders' confidence in the growth prospects of British enterprise.'

Internet link: GOV.UK

Over 200 hospitality and leisure CEOs have urged the government to scrap plans for a Visitor Levy in England.

In a letter to the Chancellor, they warn that the proposed holiday tax will 'hit families hardest, put jobs at risk and drain money from local businesses and communities'.

Signatories to the letter warn that 'holidays are for relaxing, not taxing', with the proposed tax meaning tourists would face an extra £100 or more for a two-week holiday in the UK.

The letter says this could force families to shorten trips, skip travel altogether or head overseas, spending their money elsewhere.

The letter also says there will be significant damage to local communities across England that rely on tourism for survival, as fewer visitors mean fewer local jobs and lower spending at local businesses.

Allen Simpson, Chief Executive of UKHospitality, said:

'Holidays are for relaxing - not taxing.

'Whether you enjoy a city break, a rural retreat or building sandcastles on your beach holiday, you're already paying your fair share of tax.

'In fact, it's one of the highest tax rates for visitors in Europe and the holiday tax will only increase that further.

'We are so lucky to enjoy these wonderful islands and we should be encouraging people to visit every part of our country – not taxing them for doing so.

'The government needs to scrap the holiday tax.'

Internet link: UKHospitality

New company car advisory fuel rates have been published and took effect from 1 March 2026.

The guidance states: 'you can use the previous rates for up to one month from the date the new rates apply'. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 March 2026 are:

HMRC guidance states that the rates only apply when you either:

• reimburse employees for business travel in their company cars
• require employees to repay the cost of fuel used for private travel.

You must not use these rates in any other circumstances.

The Advisory Electricity Rate for fully electric cars is below. Electricity is not a fuel for car fuel benefit purposes.

If you would like to discuss your company car policy, please contact us.

Internet link: GOV.UK AFR

HMRC has published the latest issue of the Employer Bulletin. The February issue has information on various topics, including:

• Reporting expenses and benefits for the tax year ending 5 April 2026.
• End of year reporting.
• Upcoming State Pension age changes - impact on payroll operation.
• Implementation of the Employment Rights Act 2025.
• Statutory Sick Pay changes - what employers need to know.
• Tax code changes for winter payment recovery.

Internet link: GOV.UK

Pubs and live music venues in England will be given a 15% discount on their business rates bills from April and will not see increases for two years, the government announced.

It comes after a backlash against November's Budget, which left many facing major increases in their business rates bills.

The government says that pubs have faced significant pressure as their numbers have fallen by nearly 7,000 since 2010, a roughly 15% reduction and amongst the highest across hospitality overall.

The support package will save the average pub an additional £1,650 in 2026/27, it adds.

Kate Nicholls, Chair of UKHospitality, said:

'We welcome the recognition by the Prime Minister and the Chancellor of the scale of the challenges facing the hospitality sector. They have listened to us about the acute cost challenges facing businesses, all of which is impacting business viability, jobs and consumer prices.

'The rising cost of doing business and business rates increases is a hospitality-wide problem that needs a hospitality-wide solution. The government's immediate review of hospitality valuations going forward is clear recognition of this.

'The devil will be in the detail, but we need to see pace and urgency to deliver the reform desperately needed to reduce hospitality's tax burden, drive demand, and protect jobs and growth. We will work with the government over the next six months to hold their feet to the fire to deliver this.'

Internet link: HM Treasury

Small businesses such as cafes, shops and hairdressers are facing three years of business rates misery with an average 52% hike in bills, analysis from the Federation of Small Businesses (FSB) has revealed.

This is due to the removal of business rates relief for 230,000 small firms across the retail, hospitality and leisure (RHL) sectors in England.

The removal of the relief combined with other business rates changes being introduced by the government from this April, leaves many having to pay thousands of pounds extra, says the FSB.

In a letter to the Government, FSB has urged ministers to deploy the full relief available to them for small firms in RHL. Currently, only a quarter of the potential relief included in the government's own formula is being used.

FSB Policy Chair Tina McKenzie said:

'Striving small businesses in retail, hospitality and leisure - from bakeries and coffee shops to garden centres, gyms and dry cleaners - are on the brink unless Chancellor makes a decisive intervention now.

'The tax timebomb that's currently ticking will see three years of soaring bills, threatening our high streets and the jobs and services they provide.

'Combined with other cost pressures going up in April as well, the Chancellor has to be realistic that without action on business rates relief, the burden will become too much to bear for some, who will either shrink or close down altogether.'

Internet link: FSB

The number of people using the HMRC app to pay their self assessment tax bill has increased by 65% this tax year, according to the tax authority.

Almost 340,000 people have used the HMRC app to pay their self assessment tax since 6 April 2025, an increase of 132,788 people compared to the same period last year, says HMRC.

Self assessment taxpayers need to file their tax return online for the 2024/25 tax year and pay any tax owed by 31 January 2026. HMRC is encouraging those yet to start theirs, to go to GOV.UK and do it now. Anyone who misses the deadline could be subject to an automatic £100 penalty.

HMRC says that filing tax returns ahead of the deadline means knowing how much tax to pay sooner.

The tax authority says it is quick and easy to pay via the HMRC app and set up payment reminders to make sure the deadline is not missed.

Myrtle Lloyd, HMRC's Chief Customer Officer, said:

'The self assessment deadline is less than one month away, and thousands of people have already paid their tax bill via the HMRC app. It is quick and easy to do, and you can also see your payment history. Search 'download the HMRC app' on GOV.UK to access the app and make your self assessment payment.'

The UK will bring cryptocurrencies, including Bitcoin, into a regulatory framework with legislation due by 2027.

The government says that firm and proportionate rules will give legal clarity over the sector's regulatory position.

It says they will also boost consumer confidence by ensuring consumers are robustly protected.

The changes mean that firms will need to be regulated by the Financial Conduct Authority in the same way as other providers of financial products – including being subject to established transparency standards.

Through this new regime the UK is helping to shape global standards for cryptoassets regulation.

The regime is designed to support responsible innovation, ensure open and competitive markets, and promote the UK as a destination of choice for digital asset businesses.

Chancellor of the Exchequer, Rachel Reeves MP, said:

'Bringing crypto into the regulatory perimeter is a crucial step in securing the UK's position as a world leading financial centre in the digital age.

'By giving firms clear rules of the road, we are providing the certainty they need to invest, innovate and create high skilled jobs here in the UK, while giving millions strong consumer protections, and locking dodgy actors out of the UK market.'

Internet link: HM Treasury

Five major UK banks have agreed a £11 billion lending package aimed at SMEs to support small business growth, the government has announced.

The lending commitment is one of the largest collective moves by the banking sector in over a decade. The government says this represents an 'historic show of confidence in the UK economy'. 

Senior executives from NatWest, HSBC UK, Barclays, Lloyds and Santander finalised an agreement with the government on 26 January at a roundtable in Westminster convened by the Business Secretary and the CEO of UK Export Finance Tim Reid. 

Combined, the banks serve half of all British businesses across all corners of the country.  

Peter Kyle, the UK's Business Secretary, said:

'Strengthening Britain's export potential relies on British businesses having the means, motive, and opportunity to succeed in new overseas markets.

'The £11 billion these banks are making available will help meet the ambitions of smaller British businesses to fully export, expand and exploit these international market opportunities. It is positive proof of UK lenders' confidence in the growth prospects of British enterprise.'

Internet link: GOV.UK

More than 4,800 self assessment scams have been reported since February 2025, according to data released by HMRC.

The tax authority says scammers are using persuasive and threatening tactics to target people when they are more likely to receive correspondence from HMRC. The scammers send fake tax demands or attempt to pressurise people to hand over personal information.

In the last 10 months, taxpayers have reported more than 135,500 HMRC-related scams, including 29,000 scams referring to fake tax refund claims.

HMRC is reminding customers to be vigilant and check whether the email, SMS message or phone call claiming to be from HMRC is genuine on GOV.UK.

Lucy Pike, HMRC's Chief Security Officer, said:

'Millions of people file a tax return each year and scammers mimic HMRC to try and catch unsuspecting victims out.

'I'm urging people to stay vigilant and if any emails, text messages or phone calls appear suspicious – don't be lured into clicking on links or sharing your personal information – report it directly to HMRC. Just search 'report an HMRC scam' on GOV.UK to find out more.'

The UK can expect to see big falls in the rate of inflation this year, according to the Resolution Foundation.

The think tank's prediction comes despite an increase in December 2025 that saw the UK end the year with the highest headline inflation of any G7 economy – an unwanted position it has now held for the past seven months.

UK inflation increased from 3.2% in November to 3.4% in December, keeping the UK at the top of the G7 leaderboard.

CPI inflation expectedly increased in December, driven by tobacco duty, airfares and food. Food prices rose by 4.5% in the 12 months to December, up 0.8% compared with November. Bread and cereals made the largest contribution to this rise, which is disappointing given such staples make up a larger share of spending for lower-income families.

The think tank says that better news is coming this year, with the Bank of England forecasting a broad-based 0.5 percentage point fall in January. With inflation still below the Bank's forecast, it remains on track to head back towards its target rate over the course of 2026.

James Smith, Research Director at the Resolution Foundation, said:

'UK inflation ended last year on a 'high' with an unwelcome uptick in price rises.

'And while Britain hopes to lead the G7 economic leaderboard for growth, it has instead spent the last seven months at the top of the charts for inflation instead.

'But big falls are due in 2026, with inflation finally returning to back to more normal levels. However, the scars from a long period of acute price pressures will continue to be felt by families.'

Despite falling behind its peers the UK economy could be on the brink of a turnaround so the government must ramp up rather than run-down its growth strategy, says the Resolution Foundation.

A report by the think tank warns that the UK's poor post-financial crisis economic performance has continued well into the 2020s. Its GDP per head is now languishing 15% behind its former peers, including France, Germany and Canada.

There are signs that the UK economy may be turning a corner however, with productivity growing by 3.4% over the past 18 months.

The report says the government's three-pronged strategy of restoring stability, increasing investment and reforming the economy is the right one for the challenges Britain faces.

Greg Thwaites, Research Director at the Resolution Foundation, said:

'There's lots to welcome in the government's economic growth strategy. But it has spent much of the past 18 months undermining that strategy with policy U-turns, kite-flying tax ideas and timidity in areas like trade where it needs to be bold.

'With signs that productivity may be turning a corner, the government must capitalise by ramping up its plans. It should redouble efforts to unblock housebuilding in major cities, focus job support for young and older workers, and decide whether to bite the bullet and reverse some of the damage from Brexit.'

The level of the Agricultural Property Relief (APR) and Business Property Relief (BPR) thresholds will be increased from £1 million to £2.5 million, the government has announced.

The change will allow spouses or civil partners to pass on up to £5 million in qualifying agricultural or business assets between them before paying Inheritance Tax (IHT), on top of existing allowances.

The government says the changes come after it listened to concerns of the farming community and businesses about the reforms.

It says it will protect more farms and businesses, while maintaining the core principle that the most valuable agricultural and business assets should not receive unlimited relief.

The change will be introduced to the Finance Bill in January and will apply from 6 April.

Environment Secretary Emma Reynolds said:

'Farmers are at the heart of our food security and environmental stewardship, and I am determined to work with them to secure a profitable future for British farming.

'We have listened closely to farmers across the country and we are making changes today to protect more ordinary family farms. We are increasing the individual threshold from £1m to £2.5 million which means couples with estates of up to £5 million will now pay no inheritance tax on their estates.

'It's only right that larger estates contribute more, while we back the farms and trading businesses that are the backbone of Britain's rural communities.'

Internet link: GOV.UK

The mandatory introduction of e-invoicing for all VAT-registered businesses selling to UK business customers from April 2029 will be a fundamental change, says the Chartered Institute of Taxation (CIOT).

The government announced the requirement in the Autumn Budget 2025 policy documents.

It said: 'Continued collaboration between the government and the private sector is essential for driving innovation. To drive productivity further, the government will require the use of electronic invoicing for all VAT invoices for business-to-business and business-to-government transactions from 2029, with a roadmap to be published at Budget 2026.'

The CIOT is cautioning the government against rushing into mandatory e-invoicing, calling for the use of thresholds and staged implementation to try to mitigate the impact of such significant digital change.

E-invoicing is a digital exchange of invoice information directly between the supplier and customer's accounting systems; invoices sent electronically by email with a pdf or jpeg format attachment will no longer suffice.

CIOT spokesperson Alison Kerrey said:

'E-invoicing is a fundamental change for businesses. This goes further than Making Tax Digital, because it is not just digital record keeping, it is communicating digitally with customers and suppliers.

'We are particularly concerned that those businesses that only issue and receive a handful of invoices per year will face disproportionate costs.

'The CIOT support moves to increase the adoption of e-invoicing. But if there is to be a mandate, there need to be real benefits to HMRC and UK businesses and sensible, realistic implementation.'

Internet link: CIOT

Self assessment taxpayers due to join Making Tax Digital (MTD) for Income Tax next April will not face penalties if late filing quarterly updates.

In the Autumn Budget 2025 documents, the government said it will not charge penalty points if those joining MTD submit any of their compulsory quarterly updates of income and expenses late during 2026/27.

This means that the first group of taxpayers earning non-PAYE income over £50,000 will not be liable for the new penalty regime under MTD until April 2027.

HMRC will apply the new penalty regime for late submission and late payment to all income tax taxpayers from 6 April 2027.

The new system is based on a points-based sanctions regime and will penalise those who persistently do not comply by missing filing and payment deadlines.

Under the new regime, when a taxpayer misses an annual submission deadline, they will incur a penalty point. A taxpayer becomes liable to a fixed financial penalty of £200 only after they have reached the points threshold of two for late submission of their final declaration.

Sharron West, Technical officer at LITRG, said:

'We're pleased to see the government defer penalties for the first year of Making Tax Digital.

'Making Tax Digital is the biggest change to the tax system since self assessment and because of that, we expect that there will be some teething problems when it goes live in April.

'This period of grace is especially good news for those who will be getting used to the new system without the help of a tax adviser.'

Internet link: CIOT

The removal of full tax-free salary sacrifice on pensions with a new £2,000 limit will hit over three million employees at 290,000 companies, according to government figures.

The change to pension salary sacrifice is due to come into effect from 6 April 2029 and will see a new £2,000 limit on the amount of contributions employees can make into a salary sacrifice scheme free of tax and national insurance contributions (NICs), hitting schemes run by UK employers.

Almost eight million employees currently use salary sacrifice to make pension contributions. Of these, over three million sacrifice more than £2,000 of salary or bonuses.

However, just over half of employees will fall below the threshold based on current HMRC estimates, meaning over four million pension savers will not be affected.

The government said:

'The government supports and incentivises pension saving and has retained Income Tax and NICs reliefs on pensions contributions that are worth over £70 billion per year.

'Most other salary sacrifice opportunities were closed in 2017. Salary sacrifice for pensions contributions remains, and its cost as a relief has increased markedly from £2.8 billion in forgone NICs in tax year 2016 to 2017, rising to £5.8 billion in tax year 2023 to 2024. Were no changes made, it is expected that this would nearly triple to £8 billion by tax year 2030 to 2031.'

Internet link: GOV.UK

The Spring Statement has been scheduled for 3 March 2026 by the Chancellor of the Exchequer Rachel Reeves.

Ms Reeves has asked the Office for Budget Responsibility to prepare an economic and fiscal forecast for publication on that date.

The government said:

'As set out at the Budget, the Spring forecast will not make an assessment of the government's performance against the fiscal mandate and will instead provide an interim update on the economy and public finances.

'The government will respond to the March forecast through a statement to Parliament, in line with the government's commitment to deliver one major fiscal event a year at the Budget.

'This approach gives families and businesses the stability and certainty they need and supports the government's growth mission.'

Internet link: GOV.UK