The dust has settled on the start of the new tax year and June is when the real impact begins to emerge. New rules and reporting requirements are now part of everyday business life, making this an ideal time to ensure that systems, processes and records are keeping pace.
Alongside routine compliance deadlines, there are several important developments this month that could affect planning, cashflow and reporting obligations in the months ahead. In this newsletter, we highlight some of the key issues and opportunities that businesses and individuals should have on their radar.
Making Tax Digital for Income Tax – First Quarterly Deadline Approaching
If your gross income from self-employment and/or property exceeds £50,000, you will have been brought into the new Making Tax Digital (MTD) for Income Tax regime from 6 April 2026.
Under MTD, the traditional annual self-assessment tax return is replaced by quarterly digital updates throughout the year, followed by a year-end finalisation process.
The first reporting period runs from 6 April to 5 July 2026 and the first quarterly update must be submitted to HMRC by 7 August 2026.
Although the deadline may seem some way off, now is the time to check that:
- Your records are being kept digitally and updated regularly
- You are using HMRC-compatible software
- Any gaps or errors in your record-keeping are identified and corrected early
Problems discovered in August can be time-consuming and stressful to resolve, whereas addressing them now will make your first submission much smoother.
Even if you are not yet affected, it is worth preparing ahead. The MTD income threshold is due to reduce to £30,000 from April 2027 and £20,000 from April 2028, bringing many more taxpayers into the regime.
Winter Fuel Payments and Making Tax Digital
HMRC has updated its guidance on how Winter Fuel Payments will be recovered through the tax system for individuals within Making Tax Digital (MTD) for Income Tax. Taxpayers affected should receive a letter from HMRC after submitting their 2025/26 tax return, explaining the amount due and how it should be paid.
In a separate update, HMRC has released the third edition of its MTD for Income Tax software developer newsletter. The publication highlights several common issues reported by software developers during May 2026 and may provide useful insights for businesses, agents and software providers preparing for MTD implementation.
Temporary VAT Reduction on Children’s Meals and Leisure Activities
A temporary VAT reduction will apply from 25 June to 1 September 2026, reducing the VAT rate from 20% to 5% on eligible children’s meals and certain leisure activities and attractions.
Businesses operating in the hospitality, leisure and food service sectors should review their systems now to ensure they are ready, before the change takes effect.
You may need to update your:
- Point-of-sale (POS) systems
- Invoicing software
- VAT accounting processes
- Pricing displays and promotional materials
As the reduced rate is only temporary, remember to schedule the necessary changes to revert back to the standard VAT rate from 1 September 2026. Planning both the implementation and the reversal now will help avoid disruption later in the summer.
Mileage Allowance Increase Announced
Good news for employees using their own vehicle for work journeys – the approved business mileage rate for cars and vans has increased from 45p to 55p per mile for the first 10,000 business miles. The increase applies from 6 April 2026 (backdated). Mileage over 10,000 business miles remains at 25p per mile.
The rates for motorbikes and bicycles stay the same at 24p and 20p per mile respectively.
Employers who reimbursed mileage above the previous HMRC rates and deducted tax and NI on the excess, may need to review and potentially re-run payroll for April and May following the change announced by the Chancellor on 21 May.
Leadership
Matt’s recent leadership meetings have highlighted a common challenge; feelings of inferiority in the face of business pressures. These challenges often shift attention towards self-doubt, leading people to search for evidence that they’ve done something wrong or are somehow lacking.
In many of Matt’s discussions, he explores what business owners have noticed in themselves and the unconscious behaviours that can emerge in response to pressure and uncertainty. Very often, people reach a point where “others” are being allowed to influence those feelings.
It takes resilience and self-awareness in these moments to manage the challenge constructively and avoid falling into blame or self-criticism.
More often than not, those casting judgement or making negative comments are doing so from a place of ego – serving their own need for significance or self-importance.
As Eleanor Roosevelt wisely said: “No one can make you feel inferior without your consent.”
If you’re looking for a safe and confidential space to discuss your business challenges, please feel free to contact Matt for an initial conversation. See here for further info.
How We Can Help
If you have any questions about the topics covered in this month’s newsletter and how they might affect you or your business, please don’t hesitate to reach out.
We are committed to keeping our clients ahead of regulatory changes, so you can focus on running your business with confidence.
At Clear Vision, we’re more than a team of professionals; we’re a group of people who genuinely enjoy supporting our clients. We’re here to help you.
However you need us to support you through your journey as a business owner, we’re here for you!
This month’s Clear Vision positive thought:
“Before anything else, preparation is the key to success.”
Alexander Graham Bell