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The governmentÌýhas announced a package of tax and customs measuresÌýto reduce administrativeÌýburdens, improve certainty, fairness, andÌýcustomer experience.Ìý

TheÌýmeasures supportÌýlegitimate high street businesses to compete on a level playing field, and helpÌýeconomicÌýgrowth by simplifying processes, improvingÌýguidanceÌýand modernising HMRC systems and services. It aims to makeÌýit easier forÌýindividualsÌý²¹²Ô»åÌýbusinesses toÌýgetÌýtheirÌýtaxÌýand customsÌýright first time,ÌýwhileÌýalsoÌýputting steps in place toÌýtackleÌýthose who seek to bypass the rules,ÌýstrengtheningÌýthe effectiveness of the tax and customsÌýsystems.Ìý

Simplifying andÌýmodernisingÌýthe tax system

VAT treatment of land intended for social housingÌý

The government has published a consultationÌýon the introduction of a new zero rate of VAT for the sale of land intended for the construction of social housing.ÌýThe consultationÌýisÌýseeking views on how the current VAT rules work and how a new zero rate would support the delivery of social housing, helping reduce barriers to building new homes and supporting more households into safe and decent homes. The consultation will also helpÌýensure anyÌýnew tax reliefÌýremainsÌýfair andÌýaffordable.

ReviewÌýand upratingÌýof Benchmark Scale Rates (BSR) and Overseas Scale Rates (OSR)Ìý

BSR and OSR are optional flat rates that employers can use to reimburse employees for the cost of meals and other travel expenses when they travel for work in the UK (BSR), and for accommodation and meals when they travel overseas (OSR), without having to check every receipt.ÌýIn response to stakeholder feedback, and following engagement with industry, the government has announced a review ofÌýBSRÌý²¹²Ô»åÌýOSR.ÌýBSR will be reviewed with consideration to the current costs of travel, and the reviewÌýwill look to understand if there is scope to simplify OSR with more alignment between both BSRÌý²¹²Ô»åÌýOSR.Ìý

More Timely PaymentsÌýforÌýIncome TaxÌýSelf AssessmentÌý(ITSA)Ìý

The government has published a consultation seeking viewsÌýon implementing more timely payments in ITSA, including reforms for ITSA customers with Pay as You Earn (PAYE) income who will be required to pay more of their forecastedÌýSelf AssessmentÌýliabilities in-year through PAYE from April 2029.ÌýThe government isÌýalso consulting,Ìý²¹²Ô»åÌýonÌýthe potential for moreÌýtimelyÌýpayments for otherÌýSelf AssessmentÌýtaxpayers by reforming Payments on Account. Spreading tax payments through the year into smaller, regular payments will help reduce tax debt and avoid taxpayers havingÌýtoÌýpayÌýlarger,ÌýinfrequentÌýand sometimesÌýunexpectedÌýbills.Ìý

Call for evidence onÌýPAYE Settlement Agreements (PSAs)

The government has published a call for evidenceÌý´Ç²ÔÌýPSAsÌýseekingÌýto improve understanding of how PSAs operate in practice, including how employers interpret the rules and where there may be complexity or uncertainty. The evidence gathered will allow an informed view of whether any changes are needed, with the aim of addressing unclear boundaries and inconsistent use and helping to reduce administrative burdens for employers and advisers.Ìý

Consultation on modernising the distributions framework

The government has published a consultation to explore modernising the rules that determine whether a payment to a company’s non-corporate shareholders falls within the distributions regime. This is to ensure the rules operate as intended and minimise distortions, without undermining commercial practice. The government is consulting because of the complexity of this area of the tax system, which in many cases has not been reformed since 1965, and the need to have a clear view of potential impacts before deciding whether to proceed.

Call for evidence on voluntary National Insurance contributionsÌý

The government has publishedÌýa call for evidenceÌýon voluntary National Insurance contributions to better understand how the systemÌýoperatesÌýin practice and where improvements could be made. The evidence gathered through this process will help to inform the government’s wider thinking around voluntary National Insurance contributions and any future decisions about administrative and policy reform.

Digitising theÌýoptionÌýtoÌýtax processÌý

The government will introduce new digitalÌýchannelsÌýforÌýsubmittingÌýoptionÌýto tax notifications and revocations, replacing existing paper-based processes. This change will make it easier for businesses and agents to manage VAT option to taxÌýnotifications, improving accuracy, reducing processingÌýtimesÌýand removing reliance on paper forms.ÌýIt will incorporate industry requirements, including bulk uploads, forÌýoptionÌýto tax notifications,ÌýrevocationsÌýand VAT registration cancellations.ÌýIt willÌýalsoÌýsupport a more efficient and secure digital experience forÌýtaxpayers.ÌýThese channels will be live before the end of 2026.Ìý

Consultation onÌýtheÌýtax treatmentÌýof members ofÌýUSÌýLimitedÌýLiabilityÌýCompanies and otherÌýreverse hybridsÌý

The governmentÌýpublishedÌýa consultationÌýon 10 June 2026Ìý´Ç²ÔÌýnew proposalsÌýto remove double taxation from investments in certain types of overseas entity (including US Limited Liability Companies) which can result in effective tax rates above 75%. ThisÌýproposal addresses an unintended mismatch resulting in high and unfair tax rates and is part of the wider government work to develop the UK’s offer for globally mobile talent.Ìý

First Time Buyer Individual Savings Account (ISA) consultationÌý

As announced at Budget 2025, the government has published a consultation on the implementation of a new, simpler ISA product to support first time buyers to buy a home.ÌýThe consultation sets out the policy design of the new product and seeks views on technical elements, such as ISA manager requirements and how the product should interact with other ISA types. Once available, this new product will be offered in place of the Lifetime ISA. However, it will remain possible to open a Lifetime ISA until the new product becomes available and for account holders to continue to save into their Lifetime ISA in line with the existing rules indefinitely.Ìý

ISA Reform

The government is confirming the anticircumvention rules to support reforms to ISAs announced at Budget 2025 as part of the government’s wider strategy to develop a retail investment culture. To prevent circumvention of the lower Cash ISA limit, the rules will introduce a 22% charge on interest paid on cash holdings held in Stocks & Shares and Innovative Finance ISAs (non CashÌýISAs), prevent transfers fromÌýnon CashÌýISAs into Cash ISAs for the under 65s, and prevent holding 100% Money Market Funds inÌýnon CashÌýISAs. Further details will be published in the next HMRC Tax Free Savings newsletter.Ìý

Help to SaveÌý

Following consultation and stakeholder engagement, the government has confirmed that the reformed Help to Save scheme will be delivered through aÌýmulti‑providerÌýmodel. Financial institutions, including banks, building societies and credit unions, will be able to offer Help to Save accounts directly to eligible customers, improving access and visibilityÌýby embedding the scheme within the mainstream savings market.Ìý

The government has also published a Summary of Responses to the delivery consultationÌýpublished at Autumn Budget 2024, setting out stakeholder views and the rationale for this approach.

Supplementary Data for VAT Returns

The government will explore whether better use of VAT data that businesses already hold in their digital accounting systems could help HMRC work more efficiently. This work will consider how data already held within the businesses’ digital accounting systems for audit purposes could be used to support compliance and improve the effectiveness of the tax system. Engagement with stakeholders will inform any future decisions.Ìý

Discount expenditure credit income fromÌýCorporation Tax Quarterly Instalment Payment (QIP) profit thresholds

The government plansÌýtoÌýintroduce secondary legislationÌýto amend the definition of augmented profits forÌýCorporation TaxÌýQIP. From April 2027,ÌýResearch & Development Expenditure Credits, Audio-Visual Expenditure Credits,Ìýand Video Games Expenditure CreditsÌýwill no longer be included whenÌýdeterminingÌýwhether a company is within the QIP regime. This will prevent companies from being brought into QIP solelyÌýas a result ofÌýreceiving these credits.ÌýTheÌýchangeÌýwillÌýreduceÌýadministrative burdens andÌýeaseÌýcashflow pressuresÌýfor affected companies.

ConsultationÌýon removingÌýNational Insurance contributionsÌýdebt from the scope of the Limitation Act 1980 and aligning processes with other forms of taxationÌý

The governmentÌýwill consult on proposals to remove National Insurance contributions debt from the scope of the Limitation Act 1980 and to align National Insurance contributions recovery processes more closely with other forms of taxation. The changesÌýwillÌýsimplify the tax system byÌýensuring greater consistency in how debts are treated across taxes, reducing complexity andÌýadministrativeÌýcosts associated with current recovery processes. The consultation, expected in summer 2026,Ìýwill seek views on how best to modernise and streamline those arrangements whilstÌýmaintainingÌýappropriateÌýsafeguards.Ìý

RegularisingÌýcertainÌýexistingÌýNational Insurance contributionsÌýeasementsÌýforÌýinternationally mobile individuals

The government will formalise an existing National Insurance contributions practice for non-resident directors who attend a small number of board meetingsÌýin the UK but are based in countries without a social security agreement. Under this measure, non-resident directors will be ableÌýto carry out limited UK duties without incurring a National Insurance contributions liability, providing clarity and certainty for employers and internationally mobile individuals. This will clarify the tax treatment of globally mobile directors to ensureÌýaÌýconsistent application of the rules.Ìý

There is currently aÌýNational Insurance contributions easement that allows certain employeesÌýposted abroad by their employer to work in a country with no social security agreementÌýto return to the UK for short periods without them needing to payÌýadditionalÌýClass 1 National Insurance contributions. The government is considering its approach to this practiceÌýand will work with stakeholders on providing further clarity about thisÌýin due course.Ìý

Inheritance Tax reporting requirements for non-taxpayingÌýtrustsÌý

The government will simplify Inheritance Tax reporting requirements for certain non-taxpaying trust transfers andÌýtrustÌýevents. These changes will remove the requirement for some trustees and individuals to submit Inheritance Tax accounts where no tax is due, reducing administrative burdens. This measure will provide greater clarity and efficiency in the reporting process. The government will lay regulations to make this change effective from 6 April 2027.Ìý

Start a Small Business - CustomerÌýJourney reviewÌý

The government will undertake a comprehensive review of the end-to-end customer journey for small businesses. This review will examine how businesses interact with HMRC across their lifecycle, from starting up to ongoing compliance, with the aim ofÌýidentifyingÌýkey pain points and opportunities to simplify guidance, improve services and support compliance. This will help ensure small businesses can more easily understand and meet their tax obligations.Ìý

Simplifying and modernising the customs systemÌý

Call forÌýevidence on Customs ModernisationÌý

The governmentÌýhas publishedÌýa call for evidence to capture industry views on trade digitalisation and the opportunities and challenges this poses for the future of the UK customs regime. ThisÌýwillÌýexplore key elements of the UK customs regime in the context of technological and regulatory change, to ensureÌýHMRCÌýcontinue to understand evolving trade practices and needs to enableÌýtheÌýbest supportÌýforÌýinternational trade into and out of the UK.

Digitalisation and AI Customs PilotsÌý

The government will take further steps to test and scale successful innovations within the customs system, building on recent customs digitalisation pilots, with US Customs and Border Protection testing new digital trusted trader credentials, and with industry partners testing how Electronic Trade Documents (ETDs) can be harnessed to meet customs requirements. These include:

• commencing iterative design and delivery of services allowing HMRC to process ETDs for customs applications, supporting businesses adopting fully digitalised trade processes by ensuring UK customs is better tailored to their needs

• HMRC participating in the next phase of the Department for Business and Trade’s Digital Trade Corridors programme, which is showing how ETDs can streamline business processes, to test how ETDs can be used within the UK customs system for example for documentary checks

• further testing and development of applications of digital verifiable credentials within the UK customs regime, in line with ambitions to evolve customs processes toÌýleverageÌýthe opportunities provided by digital technologies

• testing how AI can support customs caseworkers to undertake real-time border documentary checks, with the aim of improving border flow and strengthen compliance outcomes

Improving the Quality of Customs IntermediariesÌý

The government will take steps to improve the quality and standard of customs intermediaries. This includes introducing a customs intermediary standardÌýwhich was published on 3 JuneÌý2026,ÌýsubsequentlyÌýdeveloping a voluntary certification scheme for theÌýStandard, andÌýa commitment to publish a consultationÌýon new mandatory registration for intermediaries. These reforms aim to raise standards across the sector, improve trust in intermediaries and support businesses in navigating customs processes.Ìý

Digital ATA CarnetsÌý

The government introducedÌýdigital ATA CarnetsÌýon 1 JuneÌý2026,Ìýmaking the UK one of the first countries to adoptÌýthemÌýalongside the EU,ÌýSwitzerlandÌýand Norway.ÌýDigital ATA CarnetsÌýwill replace paper-based systems used for the temporary movement of goods internationallyÌýamongÌýapproximately 90 countries and territories. ThisÌýis modernisingÌýthe carnet process and reducingÌýadministrative burdens for businesses. The move to digital carnets alignsÌýthe UK with international developments and supportsÌýsmooth cross-border trade, making it easier for businesses and touring artists to move goods between the UK and other countries temporarily without payment of importÌýduties.

Changes to theÌýDuty Reimbursement Scheme for Northern IrelandÌýgoodsÌý

TheÌýgovernment introduced the Customs (Northern Ireland) (EU Exit) (Amendment) Regulations 2026 toÌýfacilitateÌýenhancements to the Duty Reimbursement Scheme, which allows businesses to reclaim ‘at risk’ duty paid on goods brought into Northern Ireland.Ìý

These changesÌýwere implemented on 26 MayÌý2026Ìý²¹²Ô»åÌýwill support theÌýgovernment’sÌýcommitmentsÌýoutlined in its response to the Independent Review of the Windsor Framework and are designed to address feedback from businessesÌýregardingÌýtheÌýscheme’s operation. The improvementsÌýare designed toÌýenhance access to the scheme by addressing concerns arising from businesses moving certain types of goods, particularly manufacturers, and easing the financial impacts of claiming where evidence of theÌýfinal destinationÌýof goods takes time to materialise.Ìý

Voluntary Disclosure PolicyÌý

The government will develop and publish a voluntary disclosure framework for customs by the end of 2026. This framework will encourage businesses to makeÌýtimelyÌýand unprompted disclosures of errors, improving compliance while reducing administrative burdens. It will also support more efficient use of HMRC resources by enabling issues to be resolved more quickly.Ìý

Intention to publish a call for evidence on access to tariff inversion and the economic condition for inward processingÌý

The governmentÌýintendsÌýtoÌýpublish a call for evidenceÌýlater in 2026Ìýon tariff inversion andÌýitsÌýoperationÌýwithinÌýthe inward processing regime. This will consider how rules on the calculation of import duty when processed goods leave the inward processing procedure affect UK businesses.

Online Trade Tariff developmentsÌý

The governmentÌýwill continue to develop the Online Trade Tariff to provide a more modern, user-friendly digital service for traders. This forms part of a two-year programme to transform the OnlineÌýTrade TariffÌýfrom a static reference tool into a smarter, journey-based service that supports businesses throughout the import and export process. Enhancements will include improved user features and the integration of AI tools to make tariff information easier to access, understand and use, helping to reduce administrative burdens and improve compliance.Ìý

StrengtheningÌýfairness and helpingÌýcustomers getÌýtheirÌýtaxÌýand customs rightÌý

Reforming the customs treatment of low value importsÌý

The government will accelerate the delivery of the new low value import customs arrangements by 6 months to October 2028 at the latest.ÌýThe government intends to ensure all goods are adequately controlled while balancing the need to promote fair competition between high street and online retailers and giving businesses involved in the sales and movement of low value goods time to prepare for the changes and avoid border disruptionÌýTo give businesses as much certainty as possible about the new arrangements, the government will publish a consultation response shortly and introduce legislation for the reforms in Finance Bill 2026-27.

Online Marketplace LiabilityÌý

The government has published a consultation seeking views on the proposed extension of the VAT online marketplace liability rules to UK based businesses. The proposed reforms intend to tackle VAT non-compliance from overseas and UK based businesses which can distort competition and place compliant businesses, both online and on the high street, at a disadvantage. The government intends to minimise impacts on genuine UK businesses not required to pay VAT, and is seeking views on options to do so.

Electronic Sales SuppressionÌýSoftware StandardsÌý(ESS)Ìý

The government has published a consultation on the introduction ofÌýsoftware standards for the Electronic and Mobile Point of Sale (EPOS/MPOS) Sector to explore how best to embed standards across the latest products and innovations.ÌýThis consultation seeks views from businesses, software developers and wider stakeholders on measures designed to prevent electronic sales suppression and support fair competition on the high street.ÌýThe governmentÌýaims to ensure any future approach minimises burdens on compliant businesses, andÌýbelieves that strengthened controls, such as modern encryption and record standardisation in the EPOS sector, have the potential to dramatically reduce the incidence of ESS or ‘till fraud’.Ìý

Tackling lower value debts

The government has published a consultationÌýseeking views onÌýproposals to extend existing powers to enable recovery of lower value tax debts. This would apply to customers who can pay but have not responded to multiple contact attempts from HMRC. Each year, over 750,000 such debts, collectively worth more than £2 billion, remain uncollected after 9 months and more than 10 attempts to contact customers to pay what they owe. The proposals would enable HMRC to collect debts directly from customers’ accounts in regular instalments, supported by a comprehensive suite of safeguards to ensure the power is used fairly and proportionately. This measure will help ensure those who can pay their tax debt do so, whileÌýmaintainingÌýtrust and fairness in the tax system.

Requiring Payment of VAT and PAYE by Direct DebitÌý

At Budget 2025, the government announced its intention to consult on making Direct Debit the mandatory payment method for VAT and PAYE return liabilities, subject to defined exceptions. The consultation has now been publishedÌýand will also consider whether any enforcement arrangements or incentives would beÌýappropriate.Ìý

Introducing a criminal offence for making reckless untrue statements or declarations in direct taxÌý

The government has published a consultationÌýon the introduction of a criminal offence of reckless untrue declarations or reckless false statements for direct tax matters, aligning the legal framework with existing offences in indirect tax. The aim is to ensure consistency across tax regimes, to ensure that those who engage in highly culpable serious non-compliance are fairly tried and properly brought to justice.

E-invoicing: core interoperability network announcementÌý

The government has announced that the electronic procurement systemÌýPeppolÌýwill be the core interoperability network for e-invoicing in the UK.ÌýThis will give software developers and taxpayersÌýan indicationÌýof the direction of travel for our work towards the e-invoicing mandate in 2029, enabling them to begin planning their product development and rollout of e-invoicing. The government will continue to engage with stakeholdersÌýregardingÌýthe role of legacy systems which cannot interoperate in the future system.Ìý

Reviewing Employment Expenses withinÌýITSAÌý

The government will review the circumstances in which customers can make claims for tax relief on non-reimbursed Employment Expenses inÌýITSAÌýto ensure requirements are effective and proportionate. Currently, employees who incur more than £2,500 of allowable expenses not already reimbursed by their employer mustÌýsubmitÌýaÌýSelf AssessmentÌýreturn to claim relief.Ìý

Publishing Details of Deliberate Defaulters ReformÌý

The government will reform the Publishing Details of Deliberate Defaulters policy. The changes will allow HMRC to publish more information aboutÌýtheÌýdeliberateÌýnon-complianceÌýthatÌýleads toÌýpublicationÌýof theÌýdefaulter’sÌýdetailsÌýand will increase the threshold for publication to £50,000 potential lost revenue. The reforms will also enable the publication of details relating to Personal Liability Notices. These changes aim to improve transparency and increase the policy’s effectiveness as a deterrent to deliberate non-compliance.Ìý

Strengthening the Customs Civil Penalty FrameworkÌýincludingÌýfor Obligations to Provide Customs InfrastructureÌý

The governmentÌýhasÌýannouncedÌýits intention to legislate to strengthen the customs civil penalty framework. This will include reviewing the maximum potential amount for customs civil penalties to further deter non-compliance, particularly for breaches of approval conditions relating to essential customs infrastructure at border locations.Ìý

Disclosure for Compound SettlementsÌý

The governmentÌýwillÌýintroduce legislation to strengthen HMRC’s ability to publish details of companies that agree a compound settlement for strategic export and sanctions offences. TheÌýnew approachÌýwill improve transparency and increase consistency between HMRC functions and enforcement outcomes on trade sanction offences across government.Ìý

Policy maintenance package to tackle promoters of tax avoidanceÌý

The governmentÌýwill introduce aÌýsmallÌýpackage of measures toÌýamend existing legislationÌýaimed at tacklingÌýpromotersÌýofÌýtax avoidance.ÌýThis includesÌýchanges toÌýthe Promoters of Tax Avoidance SchemesÌýlegislation to extend it more fully to cover VAT avoidance schemesÌýand to allowÌýHMRCÌýto publish the details ofÌýthose subject to a Stop Notice more quickly.

Further tax policy and tax administration announcementsÌý

Package of changes reforming civil tax information and inspection powers (Schedule 36 FA08) and modernising theÌýdefinitionsÌýaboutÌýcomputer recordsÌý

The government will bring forward a package of reforms to modernise HMRC’s information and inspection powers. This includes updating provisions in Schedule 36 to FA08 and theÌýdefinitionsÌýaboutÌýcomputer records in s114 FA08, ensuring HMRC can effectively access and process information in a modern, digital economy. The reforms will improve HMRC’s ability to carry out compliance checks, meet OECD Global Forum standards on information exchange, and respond to technological changes, while a planned technical consultation will help ensure safeguards remain proportionate.Ìý

Capital Gains Tax relief for gifts of business assetsÌý

The government has published draft legislationÌýto modernise Capital Gains Tax gift holdover relief for business assets. The measure will update the rules that restrict the amount of relief available when a company holds assets not used within its trade, restoring how theyÌýoperatedÌýbefore the introduction of the Substantial Shareholding Exemption and the Intangibles Fixed Assets regime. This will remove distortions that can otherwise arise in the calculation.Ìý

Land Remediation ReliefÌý

The government has published a summary of responsesÌýto the consultation on Land Remediation Relief, which closed in September 2025. This provides stakeholders with an update on the evidence gathered, the government’s assessment of the relief’s effectiveness and next steps. The publication offers greater clarity to businesses and sets out how the government is approaching reforming the relief, and the intention for further engagement with the construction and land remediation sectors.