MTD for income tax
HMRC has provided an update on testing of MTD for income tax in issue three of its newsletter Ready, steady, file!. MTD income tax will begin for many sole traders and landlords from April 2026.
The newsletter:
- reveals that approximately 3,000 taxpayers are actively submitting quarterly updates;
- provides a summary of work that has been completed and sets out the next steps for HMRC;
- explains the rules for calendar quarter elections to help taxpayers and agents avoid failed quarterly submissions; and
- invites feedback on HMRC's estimated tax collection.
Separately, HMRC has announced that, due to scheduled maintenance, MTD for income tax will be unavailable from 5pm on Friday, 16 January 2026 to 9.30am on Tuesday, 20 January 2026.
Find out more about MTD for income tax
Changes to the CIS
HMRC has published draft regulations for technical consultation that:
- exempt payments made to local authorities or public bodies from the scope of the CIS; and
- require construction contractors to file a nil return when they have not paid any subcontractors in a month, unless they have notified HMRC in advance that they will not make any such payments that month.
The changes will take effect from 6 April 2026.
The consultation closes on 3 February 2026. If you have any comments on the draft regulations that could help inform ICAEW’s response, please email Adelle Greenwood by 20 January 2026.
Pillar 2 reforms
Dan Tomlinson, Exchequer Secretary to HM Treasury (XST), has made a statement to Parliament welcoming the package of reforms to Pillar 2 approved by the OECD/G20 Inclusive Framework on BEPS. The XST said that the reforms bring “certainty and stability” for UK businesses.
The statement confirms that measures to implement the agreement in UK law will be subject to technical consultation and then brought forward in the next Finance Bill. They will apply for accounting periods beginning on or after 1 January 2026.
New compliance checks factsheet
HMRC has added CC/FS84 Third party information notices – enablers of defeated tax avoidance to its series of compliance check factsheets. CC/FS84 provides information about third party information notices for enablers, including what they are, how HMRC uses them and the consequences of failing to comply with one.
VAT: removal of linked goods concession
In Revenue and Customs Brief 1 (2026), HMRC has announced that the concession for VAT on minor promotional items supplied in linked supplies schemes (paragraph 3.7 of Notice 48) will be withdrawn as “it already falls within established case law”.
HMRC says that it “has not changed its policy on single and multiple supplies” and that businesses should continue to apply the tests set out in VATSC11113 when assessing whether a supply is a single or multiple supply.
New HMRC manuals finder tool
HMRC has published a new tool that enables the user to “search across all HMRC manuals, filter by manuals or manual pages and sort the results”.
Further information
Issue 138 of Agent Update - GOV.UK
HMRC service performance
HMRC has updated its performance report for 2025-2026 to include data for November 2025. Key points include increases in:
- the average response time for telephone calls, from 11 minutes and 46 seconds for October 2025 to 13 minutes and 27 seconds for November 2025; and
- the percentage of customers waiting more than 10 minutes to speak to HMRC, from 46.6% for October 2025 to 52.8% for November 2025.
Further information
Tax Faculty
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