Spring Bulletin 2026
Welcome to our Spring Bulletin
As spring gets underway and the new tax year begins on 6 April 2026, several important changes are coming into force that may affect both individuals and businesses. In this edition of our newsletter, we outline the key updates you need to be aware of and how they could impact your financial planning and compliance obligations.
From HMRC restarting the direct recovery of tax debts to increased penalties for late corporation tax filings, the compliance landscape is becoming more stringent. Alongside this, the continued rollout of Making Tax Digital (MTD) means many taxpayers will need to adapt to new digital reporting requirements. We also cover the latest HMRC advisory fuel rate updates, effective from 1 March 2026, which may influence business travel and expense claims.
As always, staying informed and planning is essential. We’re here to help you navigate these changes with confidence and ensure you remain one step ahead.
This month's ABMV tax bulletin will cover:
New rules coming into play from April 6th 2026 - How it may affect you
HMRC restarts direct recovery of tax debts
HMRC updates advisory fuel rates from 1 March 2026
Corporation tax late filing penalties double
Making Tax Digital (MTD)
Running the Distance, ABMV proudly sponsors Emily Makey
New rules coming into play from April 6th 2026
State Pension Age
From 6 April, the state pension age will increase from 66 to 67 years. The change is being phased in over two years, meaning any employees born between 6 April 1960 and 5 March 1961 will reach state pension age between 66 and 67 years old.
Statutory Sick Pay
From 6 April 2026, all employees, regardless of their earnings, will be eligible for statutory sick pay (SSP) from the first working day of sickness because the requirement to serve waiting days has been abolished. Employees will no longer need to be sick for at least four consecutive days to qualify; even if the employee is only sick for one day, they’ll be entitled to SSP.
Small Employers’ Relief
Businesses that qualify for small employers’ relief can currently reclaim 108.5% of employees’ statutory maternity and paternity pay, etc. For 2026/27, this will increase to 109%.
New Student Loan type. From 6 April 2026, a new Plan 5 student loan will be introduced.
2% rise in dividend taxes
Voluntary class 2 national insurance contributions for people working abroad will end. Class 3 contributions take their place. For further information, click here:
Home working relief - the flat £6 a week tax relief for employees working from home will be discontinued unless the employer directly reimburses the cost.
New employee exemption - Employees can reimburse staff tax-free for personal items such as home working equipment, paid flu vaccines & costs of eye tests.
Capital Gains Tax - Rates for business asset disposal relief rise to 18% from 14%.
HMRC restarts direct recovery of tax debts from bank accounts
HMRC has resumed the use of its Direct Recovery of Debts (DRD) powers, allowing it to collect unpaid tax directly from the bank accounts of both businesses and individuals who have failed to respond to repeated attempts to settle outstanding liabilities.
What does this mean in practice for business owners and directors?
In a recent update, HMRC confirmed that the DRD process, paused during the pandemic, has now been reinstated and is currently operating under a “test and learn” approach. Under these rules, HMRC can instruct banks and building societies to transfer funds directly from a taxpayer’s account where a debt of £1,000 or more remains unpaid, and where the taxpayer has the financial means to settle the liability but has persistently declined to do so.
HMRC updates advisory fuel rates from 1 March 2026
HMRC has released updated advisory fuel and electric rates (AFRs) for company cars, effective from 1 March 2026.
AFRs apply where employers reimburse employees for business travel or where employees repay private fuel costs. Payments at or below these rates are not taxable and do not attract NIC.
Petrol and diesel rates remain unchanged, while LPG rates have decreased across all engine sizes. The advisory rate for public electric charging has increased to reflect rising costs.
Employers may continue using the previous rates for up to one month after the change. Payroll and expense systems should now be updated accordingly. Where reimbursements exceed the advisory rates, evidence must be retained to support the actual cost per mile.
Contact us if you would like the full list of current rates.
Corporation tax late filing penalties double
Corporation tax returns that are due to be filed on or after 1 April 2026 will be subject to higher penalties if they are submitted late.
All penalties will double, and as such, the initial late filing penalty will be £200, and for returns that are submitted more than three months late, the penalty increases to £400. Where there are three successive failures, the penalties are increased to £1,000 and £2,000 respectively.
Corporation tax returns with a filing submission date on or after 1 April 2026 will be subject to increased penalties for late filing.
Making Tax Digital for Income Tax – April 2026
Making Tax Digital (MTD) for self-employed individuals and landlords with qualifying income over £50,000 will become mandatory from April 2026.
Under MTD, the traditional annual tax return will be replaced by:
Quarterly updates submitted to HMRC using MTD-compatible software
A final end-of-year declaration
ABMV can handle your MTD obligations, allowing you to focus on running your business or managing your properties.
Running the Distance, Supporting the Fight
Emily Makey from Tonbridge is running the London Marathon this April in support of Babons Cancer Support, a charity founded in memory of Jean Spickernell, who sadly passed away from cancer in 2022. Jean was a much-loved member of the Tonbridge community for over 50 years.
Emily, a close family friend who knew Jean well, felt inspired to take on this challenge after experiencing the loss of loved ones to cancer herself. She admits she’s not a natural runner, and the training has been tough, but she’s determined to complete the 26.2 miles for such an important cause.
ABMV Chartered Accountants are proud to be co-sponsoring Emily on her journey.
Every donation, big or small, will make a real difference. Your support is greatly appreciated.
If you have any questions or would like to learn more about how we can help you with your accounting and business advisory needs, please don’t hesitate to contact us. Our team of experts is always ready to assist you with any queries you may have.
