On the 23rd June 2026, the government announced a series of tax and customs measures entitled ‘Tax update 2026: simplification, modernisation and fairness summary’. With 40 different announcements, here, we outline some of the key announcements and consultations potentially relevant to our clients.
Taxation of Individuals: Key Announcements
- Capital Gains Tax relief for gifts of business assets: Draft legislation has been published to modernise the Capital Gains Tax gift holdover relief for business assets, with an aim to restrict the relief available when the company holds assets not used within its trade.
- Inheritance Tax reporting for non-taxpaying trusts: Simplification of the reporting requirements for certain non-taxpaying trust transfers and trust events. This applies to IHT as this removes the requirement for some trustees and individuals to submit IHT accounts where no tax is due
- ISA reform: cash held in non-cash ISA: The lower annual Cash ISA limit has resulted in people holding Cash within non-Cash ISAs (Stocks and Shares ISA, Innovative Finance ISA). As such, anticircumvention rules have been confirmed, introducing a 22% charge on interest paid on cash holdings in non-Cash ISAs.
Taxation of Individuals: Key Consultations
- More timely payments for Income Tax Self Assessment (ITSA): From 2029, Self-Assessment taxpayers who also have PAYE income (e.g. if someone is self-employed with some employment income) will be required to pay towards their Self-Assessment tax bill through their regular PAYE payments, rather than when they file their tax return. This consultation is explored more in our follow-up blog.
- Modernising the distributions framework: This consultation reviews whether a distribution made by companies to individuals and trusts are taxed, including loans, capital returns and dividends from non-UK companies.
Tax Administration and Other Changes: Key Announcements
- HMRC will publish more detail on deliberate defaulters and increase the threshold of publication
- Expanded powers targeting promoters of tax avoidance, including fully covering VAT avoidance schemes
- Reforms to HMRCs information and inspection powers
- Peppol will be the UKs core interoperability network, with electronic VAT invoices mandatory from April 2029
Tax Administration and Other Changes: Key Consultations
- New criminal offence for reckless untrue declarations or false statements for direct tax matters
- Proposal to require the payment of VAT and PAYE liabilities by direct debit
Corporation & Employment Taxes
- Responses published on earlier proposals to reform Land Remediation Relief
- Benchmark and Overseas Scale Rates for employee expenses to be reviewed
- Clarification expected on the tax treatment of globally mobile directors (non-resident directors attending occasional UK board meetings)
Whilst this only outlines some of the key announcements and consultations, they highlight HMRCs general shift to digital tax systems, earlier tax collection and stronger compliance activity.
