Budget and Finance Bill cycle 

The Tax Faculty was busy in August responding to consultations published by the government as part of Tax Update 2026. In articles published over the last few weeks, we explained ICAEW’s response to government proposals to:  

• introduce a new criminal offence for recklessly making an untrue statement to HMRC;
• reform the tax rules for members of reverse hybrids; 
• mandate payment by direct debit for VAT and PAYE; 
• extend HMRC’s powers to help it collect lower value tax debt;
• require more timely payment of income tax; and
• strengthen VAT compliance in the online marketplace sector. 

Further information 

• Significant changes announced at Tax Update 2026 | ICAEW 
• Government publishes draft Finance Bill legislation | ICAEW 
• Significant changes proposed to the taxation of distributions | ICAEW

Making Tax Digital 

The first quarterly updates for 2026/27 under Making Tax Digital (MTD) for income tax were due for submission by 7 August 2026. In an article and podcast published in August, we explored how agents responded to the challenges – from managing clients to dealing with technology – and considered the lessons to be learned ahead of the next submission deadline, on 7 November 2026.  

Also in August, HMRC announced that it will begin to sign up those taxpayers who are within scope of MTD income tax from April 2026 and have not yet signed up themselves. In our article covering the announcement, we explained how the process is expected to work, and why taxpayers and agents should consider taking action before HMRC does.

Tax reform 

In the latest episode of The Tax Track podcast, we talked to the authors of a report on tax complexity. Topics discussed include the challenges faced by businesses in meeting their tax obligations and the causes and implications of tax complexity. 

Other news 

In other articles published in August, we: 

• explained why the government has commissioned an independent review of the business rates valuation methodology for pubs and hotels; 
• considered updated guidance from HMRC on the temporary reduced rate of VAT for children's meals, tickets and family attractions that applied between 25 June and 1 September 2026; and   
• highlighted HMRC’s latest one-to-many campaign, focusing on businesses running prize draws.