Tax E-News – October 2026

Welcome to the October 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.

CRYPTOASSETS: WHY INVESTORS MUST DECLARE INCOME AND GAINS TO HMRC

The UK does not have a separate crypto tax regime. Instead, existing tax rules are applied depending on the nature of the transaction.

For most private investors, profits are taxed under the Capital Gains Tax (CGT) rules. A taxable disposal can occur when you:

• Sell crypto for cash.
• Exchange one cryptoasset for another.
• Use crypto to buy goods or services.
• Gift crypto to someone other than a spouse or civil partner.

Many people are surprised to learn that swapping Bitcoin for Ethereum is a taxable event, even if no cash is received.

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WHEN IS VAT ON CARS RECLAIMABLE?

A business can normally only reclaim VAT on the purchase of a car if the car is not available for any private use whatsoever. This is a very strict test. Typically, the business must be able to demonstrate that private use is prohibited and impossible in practice.

Examples where VAT recovery may be allowed are set out in HMRC guidance and The Value Added Tax (Input Tax) Order 1992 and include:

• A car used exclusively as a taxi.
• A driving school vehicle with dual controls.
• A car acquired solely for resale by a motor dealer.
• A car held for short-term hire.
• A company car kept permanently on business premises and not available for private use.

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MTD FOR INCOME TAX: THE STORY CONTINUES IN 2027

Certain landlords and self-employed individuals should start preparing now for the next phase of Making Tax Digital (MTD) for Income Tax. Taxpayers with qualifying income above £30,000 in the 2025/26 tax year will be required to join MTD from 6 April 2027. Qualifying income includes gross income from property lettings and self-employment before expenses are deducted.

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ADDITIONAL SELF ASSESSMENT DISCLOSURES FOR DIRECTORS IN 2025/26

Additional reporting requirements for directors of close companies came into force for Self Assessment returns from 2025/26 onwards. A close company is generally a company that is controlled by five or fewer shareholders or by its directors. The new requirements mean directors of close companies must report the following on their tax return: 

• The name of the close company.
• The registered number of the close company. 
• The amount of income they receive from dividends from that company in that tax year. 
• The highest percentage of their shareholding. 

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DIARY OF MAIN TAX EVENTS

OCTOBER  / NOVEMBER 2026