Just when we thought summer was all about barbecues, questionable tan lines and hoping the rain stays away for at least one weekend, the Chancellor has announced a package of measures designed to put a little more money back into people's pockets.

The "Great British Summer Savings" package, announced on 21 May 2026, includes a handful of changes that may affect both businesses and individuals. Some are welcome news, while others are a reminder that HMRC remains as interested in your paperwork as ever.

Let's take a look at the highlights.

Mileage Rates Get a Boost

If you use your own vehicle for business journeys, there is some good news.

The tax-free mileage rate for the first 10,000 business miles driven in a car or van has increased from 45p to 55p per mile for the 2026/27 tax year. Better still, the increase has been backdated to April 2026.

For both employees and the self-employed, the updated rates are:

For employees, bicycle rates remain unchanged at 20p per mile.

While a 10p increase might not sound life-changing, it can add up quickly for businesses and individuals who spend a significant amount of time on the road. Every little helps, especially when fuel prices seem determined to keep us guessing.

Summer VAT Discounts for Family Activities

From 25 June until 1 September 2026, a temporary reduced VAT rate of 5% will apply to a range of child-focused activities and attractions.

Eligible supplies include:

• Children's meals consumed on restaurant, café or similar premises.
• Children's tickets for cinemas, theatres, concerts and shows.
• Admissions to family-friendly attractions such as museums, zoos, heritage sites, amusement parks and soft play centres.

One particularly interesting feature is that attractions qualifying for the reduced rate can apply it to all admissions, regardless of the visitor's age.

For businesses operating in these sectors, this may create opportunities to attract more customers during the summer months. It may also mean reviewing pricing structures and ensuring VAT systems are updated correctly.

As always with VAT, the rules are straightforward right up until the moment they aren't.

HMRC Wants More Information About Dividends

If you complete a Self Assessment tax return and hold directorships in limited companies, HMRC is introducing additional reporting requirements for the 2025/26 tax year.

New sections on the employment pages will require details including:

• Whether the company was a close company.
• The company's name and registration number.
• The amount of dividends received.
• The highest percentage shareholding held during the year.

Failing to provide the required information could result in a £60 penalty.

The additional disclosures are another sign that HMRC is paying closer attention to dividends received from owner-managed businesses. If you're taking dividends from your company, it's worth making sure that board minutes, dividend vouchers and supporting documentation are all properly maintained.

Nobody enjoys extra paperwork, but it is considerably more enjoyable than explaining missing paperwork to HMRC.

Research & Development Claims: More Support, More Scrutiny

R&D tax relief continues to evolve, with HMRC taking a two-pronged approach of offering support while increasing compliance checks.

New Advance Assurance Pilot

HMRC has launched a new targeted advance assurance service for SMEs making R&D claims.

The pilot allows businesses to seek HMRC's view in advance on specific technical areas, including:

• Whether a project qualifies as R&D.
• Whether overseas expenditure is eligible.
• Contracted-out R&D arrangements.
• PAYE and National Insurance cap exemptions.

For businesses operating in complex areas, obtaining clarity before submitting a claim could provide valuable certainty and potentially avoid lengthy enquiries later.

Tribunal Case Highlights Common Pitfalls

A recent tax tribunal decision involving Beer Express Ltd provides a useful reminder that a successful R&D claim requires more than simply describing innovative work.

The tribunal found that the company had not adequately demonstrated:

• The existing technological baseline.
• The scientific or technological advance being sought.
• The uncertainties being overcome.

The reports supporting the claim were criticised for being vague and lacking technical substance.

Perhaps most importantly, there was no evidence from a suitably qualified technical expert who could explain why the work met the R&D criteria.

When HMRC challenged the claim, the adviser who had prepared it was no longer involved, leaving the company unable to fully defend the position.

The result? The claim failed entirely.

The lesson here is simple: R&D relief remains valuable, but claims need robust technical evidence and competent professional support. The days of "it seemed innovative at the time" are unlikely to impress HMRC.

Are Football Referees Employees?

It's a question that sounds like the start of a pub debate, but it recently reached the Tax Tribunal.

In the case of Professional Game Match Officials Ltd (PGMOL) v HMRC, the tribunal considered whether football referees should be treated as employees for tax purposes.

HMRC argued that PAYE and National Insurance should apply to match fees paid to referees. After a lengthy legal journey that reached the Supreme Court, the case returned to the First-tier Tribunal for a final decision on employment status.

The tribunal ultimately concluded that referees were self-employed.

The key factors included:

• No obligation for PGMOL to offer matches.
• No obligation for referees to accept appointments.
• Flexibility to decline or withdraw from engagements.
• Individual match appointments being separate engagements.
• Limited integration into the organisation.

The decision reinforces a principle we frequently see in employment status cases: there is rarely one decisive factor.

Determining whether someone is employed or self-employed requires looking at the whole relationship, not simply the contract title.

If you're engaging freelancers, contractors or consultants, it may be worth reviewing those arrangements before HMRC reviews them for you.

Key Tax Dates: June and July 2026

A quick reminder of some upcoming deadlines:

1 June 2026
Corporation Tax due for companies with a year-end of 31 August 2025 (unless quarterly instalments apply).

19 June 2026
PAYE, National Insurance and CIS liabilities due for the month ending 5 June 2026.

1 July 2026
Corporation Tax due for companies with a year-end of 30 September 2025 (unless quarterly instalments apply).

19 July 2026
PAYE, National Insurance and CIS liabilities due for the month ending 5 July 2026.

31 July 2026
Second Self Assessment payment on account for the 2025/26 tax year.

This is one of those deadlines that tends to sneak up on people. Future-you will be grateful if present-you gets organised early.

Need Advice?

Whether you're reviewing mileage claims, navigating VAT changes, planning dividend payments or considering an R&D claim, our team is here to help.

If you'd like to discuss how any of these developments affect you or your business, get in touch with Quove. We'll help you make sense of the rules without requiring a law degree or a referee's whistle.

Categories: Positive Accountant