MTD testing update
HMRC has published an update for participants in MTD income tax beta testing. The bulletin sets out progress made to date, provides answers to frequently asked questions and encourages participants in the trial to give their views by completing a survey.
HMRC says that it has received 2,037 successful quarter one submissions for 2025/26 and reminds participants that they can now start to finalise their second cumulative quarterly update.
Learn more about MTD income tax by visiting ICAEWs MTD hub. This includes guidance on signing up to test MTD income tax. As reported in an earlier article, agents can complete an online form to access support from HMRC in preparing for MTD income tax.
New HMRC guidance
HMRC has published guidance on the following areas:
- Umbrella companies. Guidance has been added to HMRC’s employment status manual on anticipated changes to the umbrella companies legislation. The changes are provided for by draft legislation for inclusion in Finance Bill 2025/26 and are due to take effect from April 2026. The legislation will make employment agencies or end clients joint and severally liable for pay as you earn where an umbrella company forms part of a labour supply chain. ICAEW provided a summary of the measures in an earlier article.
- Residence. Guidance has been published on GOV.UK for long-term UK residents (formerly, “non-domiciled” individuals) and qualifying new UK residents, and their employers and representatives, on the changes effective for 2025/26 onwards. ICAEW’s Tax Faculty explained the changes in an earlier article and episode of The Tax Track podcast.
Advisory fuel rates for electric cars
As reported previously, in August 2025, HMRC published advisory electric rates for fully electric cars for home and public charging to be used from 1 September 2025.
HMRC has now updated the accompanying guidance to explain how to apportion mileage for journeys where a company car is charged at both public and residential locations. HMRC says that the employer may “apportion the mileage based on how much charging happens at each place” and that “the apportionment calculation should be fair and reasonable”.
Tax Faculty
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.