07 Jul What’s New from HMRC This Summer: Key Deadlines and Changes for 2026
The summer of 2026 is shaping up to be one of the most significant periods for UK tax in recent years. Between the rollout of new digital reporting requirements and a shift in how we manage business expenses, there is plenty for small business owners and sole traders to keep track of.
At Harrison’s Accountancy, we know that keeping up with HMRC updates can feel like a full-time job in itself. That is why we have pulled together this essential roundup of the latest changes, deadlines, and warnings you need to know about as we head into July. Whether you are a media consultant in London or a small business owner in Biggleswade, these updates will likely affect your day-to-day operations.
Are you ready for the first MTD for ITSA quarterly deadline?
The first mandatory quarterly update for Making Tax Digital for Income Tax is due on 7 August 2026.
If your qualifying business or property income is above £50,000, you are now officially in the era of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA). The big date to circle in red is 7 August 2026.
This is the deadline for your first quarterly update, covering the period from 6 April to 5 July 2026. Unlike the old system where you’d see us once a year to wrap everything up in January, MTD requires you to keep digital records and send a summary of your income and expenses to HMRC every three months.
What should you do right now?
- Check your software: Ensure you are using MTD-compatible software (like Xero, where we are Platinum Champions).
- Review your records: If you haven’t started digital record-keeping yet, now is the time to start. Waiting until August will make that first submission much more stressful than it needs to be.
- Ask for help: If you are unsure if you meet the threshold or how to make your first submission, don't panic. As your small business accountant, we are here to walk you through the setup.
What does Basis Period Reform mean for your business?
HMRC has changed how unincorporated businesses are taxed to align with the tax year.
For many years, sole traders and partnerships could choose their own accounting year-end (for example, 31 December). However, we are now fully transitioned into the "tax year basis." This means that regardless of your actual accounting year-end, you are taxed on the profits arising in the tax year (6 April to 5 April).
If your accounting year doesn't already end on 31 March or 5 April, you might notice some complexity in your recent tax returns. The goal is to make things simpler for MTD, but the transition can be tricky. We are helping our clients manage any "overlap relief" or transitional profits to ensure they aren't paying more tax than necessary during this shift.
A serious warning about "Bills of Exchange" fraud
HMRC has issued a high-level warning regarding fraudulent schemes claiming to "cancel" tax debts.
This is particularly relevant for our clients in the media and entertainment industry and recruitment sectors. We have seen a rise in "promoters" suggesting that you can pay your tax or National Insurance liabilities using something called a "Bill of Exchange."
The claim is usually that these documents have a pseudo-legal status that allows you to discharge debt without actually spending money. To be clear: this is tax fraud. HMRC does not accept these documents, and using them can lead to heavy penalties, interest, and even criminal prosecution.
So how do you spot these? If anyone tells you they have a "secret" or "legal loophole" to wipe out your tax bill using documents labelled as "Promissory Notes" or "Bills of Exchange," walk away. If you are ever unsure about a piece of tax advice you’ve received from someone other than your qualified accountant, please check with us first.
Compliance updates for Creative Tax Reliefs
The landscape for film, TV, and theatre tax reliefs is changing this summer.
For our media and arts clients, there are a few moving parts to be aware of regarding HMRC updates 2026. The government is continuing to transition older reliefs into the new Creative Industries Expenditure Credits (AVEC and VGEC).
Key points for this summer:
- Theatre and Orchestras: From 1 April 2026, the temporary higher rates of relief have begun to taper. For touring productions, the rate has moved to 45%, and for non-touring, it is now 40%.
- Strict Compliance: HMRC is being much more rigorous with "cultural test" requirements and cost breakdowns. Ensure you are keeping meticulous records of "core expenditure" versus "non-core" to avoid claims being rejected.
Why the "Early Self Assessment Nudge" actually makes sense
Filing your tax return early doesn't mean you have to pay early: it just means you can relax.
We know, we know. It’s July. The sun is (hopefully) out, and the last thing you want to think about is your Self Assessment deadline in January 2027. But there is a very good reason HMRC is nudging people to file earlier this year.
With the introduction of MTD for ITSA, the end-of-year process is changing. By getting your 2025/26 tax return filed now, you:
- Know exactly what you owe: No nasty surprises on 31 January.
- Clear the decks: You can focus on your new quarterly MTD obligations without the "old" tax year hanging over your head.
- Get your refund faster: If you are owed money, why let HMRC keep it until next year?
If you haven't sent us your records for the tax year that ended in April 2026 yet, try to get them to us before the summer holidays kick in. Your future self will thank you!
AMAPs and Direct Debit: The practical bits
Keep an eye on mileage rates and how you pay HMRC.
Finally, two smaller but very practical updates from the recent HMRC Tax Update 2026 email:
1. Approved Mileage Allowance Payments (AMAPs)
While the standard rates (45p for the first 10,000 miles) have remained static for a long time, there is ongoing discussion about potential 2026/27 adjustments to account for the rising cost of motoring and the shift toward electric vehicles. We recommend reviewing your business expenses frequently to ensure you are claiming every mile correctly.
2. Direct Debit Changes
HMRC is improving its "Variable Payment Plan" for those who pay via Direct Debit. This is designed to be more flexible, but it’s important to check that your mandates are still active, especially if you have recently changed banks or business structures (like moving from a sole trader to a Limited Company).
How Harrison’s Accountancy can help
Navigating these changes doesn't have to be a solo mission.
Whether you are feeling anxious about the 7 August MTD deadline or you need specific advice for the media industry, we are here to help. Our goal is to act like your own CFO: taking the stress out of the numbers so you can focus on what you do best.
Ready to get ahead of the summer deadlines?
Contact us today to discuss how these HMRC updates affect your business or to get started on your early tax return.
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