Tax E-News – August 2026
Welcome to the August 2026 edition of Tax E-News. We hope that you find this informative. Please contact us if you wish to discuss any matters in more detail.
QUESTIONS OVER FUTURE TAX CHANGES UNDER NEW PRIME MINISTER ANDY BURNHAM
Since becoming Prime Minister, Andy Burnham has made cost-of-living support a key focus. One headline measure announced this month is the planned removal of VAT on household electricity from October 2026, which the Government estimates could reduce average household bills by around £45 a year. Household electricity is currently subject to VAT at 5%.
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HMRC’S 2026 TAX UPDATE
Prior to Andy Burnham’s appointment as Prime Minister and the appointment of John Healey as Chancellor, HMRC published a raft of consultations and policy announcements on 23 June 2026.
The wide-ranging package of consultations and policy announcements was aimed at making the tax system simpler, more digital and, in HMRC’s words, fairer. While many of the proposals are still at consultation stage, they give us an indication of the government’s direction of travel over the next few years.
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REVIEW OF BENCHMARK SCALE RATES
Employers should note that HMRC is reviewing its Benchmark Scale Rates (BSRs) and Overseas Scale Rates (OSRs).
These are the flat-rate allowances businesses can use to reimburse employees for meals, accommodation and travel expenses without checking every receipt. The government says the review will consider whether current rates still reflect actual costs and whether the system can be simplified.
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HMRC TARGETS SIDE HUSTLE INCOME
HMRC has launched a fresh summer campaign reminding people with “side hustles” that extra income may need to be reported for tax purposes. The announcement specifically highlights people earning income from wedding services, online selling, content creation, freelancing and similar activities.
The key figure remains the £1,000 trading allowance. If total income from side activities exceeds £1,000 during the tax year, there may be an obligation to register for Self Assessment and declare the income to HMRC.
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DIARY OF MAIN TAX EVENTS
AUGUST / SEPTEMBER 2026
| Date | What’s Due | |||
|---|---|---|---|---|
| 1 Aug | Corporation Tax for year to 31/10/2025, unless quarterly instalments apply | |||
| 7 Aug | Deadline for the 2026/27 first Quarterly Update, required for those already mandated into MTD for Income Tax | |||
| 19 Aug | PAYE & NIC deductions, and CIS return and tax, for month to 05/08/2026 (due 22 August if you pay electronically) | |||
| 1 Sept | Corporation Tax for year to 30/11/2025, unless quarterly instalments apply | |||
| 19 Sept | PAYE & NIC deductions, and CIS return and tax, for month to 05/09/2026 (due 22 September if you pay electronically) | |||