Summer has a habit of making everything feel a little more relaxed. Unfortunately, HMRC doesn't share the same seasonal outlook.

From payroll reforms and digital reporting deadlines to AI-powered tax guidance and updated mileage rates, there are several developments that businesses should have on their radar over the coming months.

Here's what you need to know.

Mandatory Payrolling of Benefits in Kind Is on the Way

After several delays and consultations, HMRC has confirmed that mandatory payrolling of Benefits in Kind (BiKs) will begin from 6 April 2027.

In simple terms, most employee benefits will move away from the familiar end-of-year P11D process and instead be reported through payroll as they're provided. Income Tax and Class 1A National Insurance will be dealt with during each payroll run, rather than becoming part of the annual administrative marathon.

Phase One – April 2027

The first stage will cover:

• Company cars and fuel
• Vans and van fuel
• Employer-provided medical benefits

Phase Two – April 2028

Most remaining taxable benefits will follow a year later.

The only exceptions currently staying outside the mandatory system are:

• Beneficial loans
• Employer-provided living accommodation

What Does This Mean?

The good news is that, over time, employers should have fewer year-end forms to complete.

The less-good news is that payroll accuracy becomes even more important. Instead of spotting mistakes months later, errors are more likely to surface while the year is still in progress, meaning corrections may need to happen much sooner.

It's a bit like swapping one big spring clean for keeping the house tidy every day. There's less to tackle at the end, but you can't ignore the washing up for quite as long.

HMRC will release further technical guidance throughout 2026, giving employers time to prepare.

If your business provides employee benefits, now is an ideal opportunity to review what's offered, understand which benefits fall into the first phase and make sure your payroll systems will be ready.

Making Tax Digital: The First Deadline Is Almost Here

Making Tax Digital (MTD) for Income Tax is now fully underway for many self-employed individuals and landlords with qualifying income above £50,000.

Instead of waiting until after the tax year to report everything in one go, businesses must now keep digital records and submit updates every quarter using compatible software.

The first quarterly submission for 2026/27 is due by 7 August 2026.

If we look after your bookkeeping or submit your MTD updates, we'd encourage you to send your records well before the deadline.

Waiting until the final week rarely makes anyone's life easier. Much like packing for a holiday the night before, it usually feels manageable until you realise something important has been left behind.

If you're unsure whether MTD applies to you, or you're not certain what information is required, we're always happy to help.

GOV.UK Chat: A New AI Assistant for Tax Questions

Artificial Intelligence has now found its way onto GOV.UK.

The Government has launched GOV.UK Chat, an AI-powered assistant that helps users find official guidance by asking questions in plain English.

It can help explain topics including:

• Income Tax
• Stamp Duty
• State Pension and retirement planning

For straightforward questions, it can be a useful place to start.

However, it's important to remember what it doesn't do.

The chatbot only works from published GOV.UK guidance. It doesn't access HMRC's technical manuals, interpret unusual circumstances or replace professional advice.

Like every AI tool currently available, it can also produce answers that sound very confident while being less than entirely correct.

Our advice is to treat it as a helpful sat-nav rather than the final destination. It's excellent for pointing you in the right direction, but for more complicated tax questions it's still worth checking the route before setting off.

VAT on Public EV Charging Remains Unchanged (For Now)

Electric vehicle drivers may have seen headlines suggesting VAT on public charging could be reduced.

Those headlines stem from a recent First-tier Tribunal decision involving Charge My Street Ltd v HMRC, where the tribunal found that electricity supplied through public charging points could qualify for the reduced 5% VAT rate.

HMRC, however, has applied for permission to appeal and continues to maintain that electricity supplied through public charging points should remain subject to the standard rate of VAT.

For now, the position remains:

• Charging at home generally benefits from the reduced 5% rate.
• Charging at public charging stations remains standard-rated.

It's another reminder that tax rules don't always move as quickly as the news headlines.

Advisory Fuel Rates Updated

HMRC's latest Advisory Fuel Rates came into effect on 1 June 2026.

These rates help determine how much employers can reimburse employees using company cars for business journeys without creating a taxable benefit.

Several rates have increased since the previous update.

Current Advisory Fuel Rates

Hybrid vehicles continue to use the petrol or diesel rates.

Fully electric vehicles use:

• 7p per mile when charged at home.
• 15p per mile when charged using public charging facilities.

Previous advisory rates can continue to be used for one month after the new rates come into effect.

Employees Using Their Own Vehicles

Employees using their own cars for business journeys can receive:

• 55p per mile for the first 10,000 business miles.
• 25p per mile thereafter.

For National Insurance purposes, employers can continue reimbursing at 55p per mile regardless of total mileage.

Where employees purchase their own fuel and keep a valid VAT receipt, businesses may also be able to reclaim the VAT element of the fuel portion of the mileage allowance.

Not every tax update is exciting, but claiming everything you're entitled to is usually more satisfying than leaving money behind.

Tax Diary: July & August 2026

A few important dates worth adding to the calendar:

These dates have an unfortunate habit of arriving much sooner than expected. A reminder in the diary today is usually preferable to an apology tomorrow.

Need a Hand?

Whether you're preparing for mandatory payrolling, getting to grips with Making Tax Digital or simply checking you're claiming the right mileage rates, we're here to help.

If you'd like to discuss how any of these changes affect your business, get in touch with the Quove team. We'll help you navigate the rules without expecting you to memorise the HMRC manual.

Categories: Positive Accountant