Government announcements 

On 23 June 2026, the government announced a package of measures intended to simplify and modernise the tax and customs system. Our overview article, published the following day, provides a summary of the key announcements, and we are in the process of publishing further articles looking at some of the consultations in more detail.  

Articles published to date explain the government’s plans to: 

• reduce the high effective tax rate suffered by UK-resident members of reverse hybrid entities, including the United States limited liability company;
• require some taxpayers to pay their income tax self assessment liabilities earlier than is currently the case; and
• introduce a new criminal offence for making reckless untrue statements or declarations in relation to direct tax matters.  

Prior to Tax Update 2026, the government announced that it will take a phased approach to mandatory payrolling of benefits in kind, having previously said that all benefits, other than employment-related loans and accommodation, would be subject to mandatory payrolling from April 2027. In our article, we explain how the government’s new approach will work. 

Latest tax gap figures 

Also on 23 June 2026, HMRC published its initial estimate of the tax gap for 2024/25. We gave our initial reaction to the figures in an article published on the same day.  

Key points include that: 

• The percentage tax gap has widened, from 6% of total tax liabilities for 2023/24 to 6.4% for 2024/25. Significant changes were made to the figures for earlier years, which HMRC says “illustrates the uncertainty around the estimation of tax gaps and highlights why they are best used as a long-term indicator of compliance”. 
• The corporation tax gap continues to be stubbornly high. It has been in the region of 18% since 2019/20, having been as low as 6.4% for 2011/12. However, HMRC says that “there is emerging evidence that the small businesses corporation tax gap may be understated for years before 2019 to 2020”.
• Failure to take reasonable care continues to be the largest component of the tax gap by behaviour, at 35% for 2024/25.  

To learn more about the tax gap, read our explainer article. 

Consultation responses 

We responded to several government consultations in June 2026. Articles published in TAXwire explain why we: 

• expressed broad support for taxing returns on stablecoins as interest, and not as capital gains;   
• called for more time to modernise and standardise company tax returns; 
• encouraged the government to do more to address tax uncertainty; and
• warned against the introduction of new reporting requirements for close companies. 

Making Tax Digital

Making Tax Digital (MTD) for income tax continues to be an important topic for taxpayers and agents. During June, we:  

• published an article highlighting changes to HMRC’s guidance on the exemption from MTD income tax where a claim has been made for averaging relief; and
• updated our TAXguide 04/25. This provides answers to various questions raised during ICAEW webinars and includes responses from HMRC.

Multi-factor authentication 

As explained in our article, HMRC provided an important update in June on the timetable for implementing multi-factor authentication (MFA) on agents’ accounts. Also in June, we updated our TAXguide explaining the options for MFA.  

Tax compliance and investigations 

For practical guidance on completing tax returns and dealing with HMRC enquiries: 

• read our article on how to deal with furnished holiday lets in the 2025/26 tax return; and
• listen to the latest episode of The Tax Track podcast in which we discuss how to prepare for a VAT enquiry. 

Tax reform 

We are continuing our work on how to build a better tax system, and have published a paper explaining why tax policymaking is in need of reform, and what can be done to improve it. Visit the hub page to learn more.  

Also in June, we published an article from Yige Zu on how to modernise the UK’s VAT system. Learn more about why the VAT system is in need of reform by visiting our How to fix VAT campaign hub.