Before Andy Burnham’s appointment as Prime Minister and John Healey’s appointment as Chancellor, HMRC published a wide-ranging package of consultations and policy announcements on 23 June 2026.
The measures are intended to make the tax system simpler, more digital and, in HMRC’s words, fairer.
Many remain at consultation stage, so they do not represent immediate changes to the law. However, they provide a useful indication of the Government’s direction of travel over the next few years.
Accelerated, more frequent tax payments
Perhaps the most significant proposal is a consultation on “Timely Payments” for Self Assessment taxpayers.
The Government is exploring ways of collecting more tax during the year, rather than relying on large payments in January and July.
For taxpayers who receive both PAYE income and Self Assessment income, the proposal could mean more of their tax liability being collected through PAYE from April 2029.
HMRC is also considering wider reforms to the Payments on Account regime for other Self Assessment taxpayers. Under these proposals, taxpayers would pay all of their forecast tax liability during the tax year. A balancing payment or repayment would then be due once their final tax position is established on 31 January following the end of the tax year.
For many sole traders and landlords, spreading payments throughout the year could make budgeting easier and reduce the impact of large tax bills.
However, it could also mean paying tax sooner than under the current system, making good cash flow planning particularly important.
Review of benchmark scale rates
Employers should also be aware that HMRC is reviewing its Benchmark Scale Rates (BSRs) and Overseas Scale Rates (OSRs).
These are flat-rate allowances that businesses can use to reimburse employees for meals, accommodation and travel expenses without having to check every individual receipt.
The Government says the review will consider whether the current rates continue to reflect actual costs and whether the system could be simplified.
For growing businesses with employees who regularly travel for work, any simplification could reduce administration and make expense claims more consistent.
Electronic Invoicing
HMRC’s Tax Update also included an important announcement about the future of electronic invoicing, or e-invoicing, in the UK.
The Government has confirmed that the Peppol framework will form the core network supporting the UK’s planned e-invoicing system.
E-invoicing is more than simply emailing a PDF invoice. Instead, invoices are created in a standard digital format and transferred directly between accounting systems. This can reduce manual data entry, improve accuracy and help speed up payment processing.
Peppol is an international framework that allows different accounting and finance systems to exchange invoice information securely and consistently.
The Government is working towards a mandatory e-invoicing regime from 2029, primarily covering VAT invoices for business-to-business and business-to-government transactions.
HMRC has confirmed that businesses will exchange invoices through software providers rather than through a central Government platform.
For small businesses, there is no need to panic or make immediate changes. However, this is a good opportunity to review your current bookkeeping and invoicing systems.
Businesses already using modern cloud accounting software are likely to find the eventual transition easier than those still relying heavily on manual processes.
A full implementation roadmap is expected later in 2026.
PROPOSED CHANGE TO THE CGT HOLDOVER RELIEF CALCULATION
The Government has published draft legislation intended to correct an anomaly in the Capital Gains Tax (CGT) holdover relief rules for gifts of business assets.
Holdover relief allows a capital gain arising on a gift to be deferred until the recipient subsequently disposes of the asset.
The proposed change would amend the formula used to calculate relief on certain share transfers, helping to ensure that the relief works as intended.
The measure is not yet law, but it could improve the tax position for some business owners transferring shares as part of succession planning, family ownership arrangements or business restructures.
If you are considering a transaction that could be affected, it may be worth discussing whether there could be an advantage in waiting until the legislation is enacted. Delaying could result in a more favourable outcome in some circumstances, although professional advice should always be sought before making a decision.
Modernising how company payments to shareholders are taxed
The Government has also launched a consultation on modernising the rules that determine how certain payments from companies to shareholders are taxed.
Many of the existing rules date back decades and have become increasingly complex.
The review covers areas including distributions, returns of capital, company reorganisations and interactions with the loans to participators rules.
For owner-managed businesses, this is unlikely to result in immediate changes. However, it signals potential future reform in an area that can affect dividends, company restructures and the extraction of profits from a business.
Further digital compliance and anti-fraud measures
Several of the consultations also focus on tackling tax evasion and improving compliance.
Proposals include:
- Extending VAT liability rules for online marketplaces.
- Introducing software standards designed to combat electronic sales suppression systems.
- Creating a new offence relating to reckless untrue statements in direct tax matters.
For businesses already meeting their tax obligations, these measures are largely intended to create a more level playing field by targeting those who deliberately understate sales or avoid their tax responsibilities.
What happens next?
Most of the measures announced on 23 June are consultations rather than immediate changes to the law.
However, they give businesses and individuals an early indication of where tax administration is heading, including:
- Greater use of digital systems.
- More real-time tax reporting and payment.
- Increased focus on compliance and data.
- Simplification of some long-standing tax rules.
For now, the best approach is to maintain good records, keep robust bookkeeping systems in place and monitor consultations that could affect you or your business.
Many of today’s consultations have the potential to become tomorrow’s tax rules.
Read HMRC’s full Tax Update here:
https://www.gov.uk/government/publications/summary-of-tax-update-2026-simplification-modernisation-and-fairness/tax-update-2026-simplification-modernisation-and-fairness-summary
Not sure what these proposals could mean for you or your business?
We can talk you through the changes, identify the areas most relevant to you and help you prepare.
