August 2026 Newsletter
Don't ignore Simple Assessment letters, says HMRC
HMRC has urged customers not to ignore Simple Assessment letters for the 2025/26 tax year.
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HMRC issues around 1.8 million Simple Assessment letters and stated that people should check the figures in their letter against their own records.
The letters will be sent to those who have tax to pay on income that has not been taxed through Pay As You Earn (PAYE) or Self Assessment.
Individuals may receive a Simple Assessment letter if they owe tax that cannot be collected automatically by HMRC, for example, if:
- there is tax to pay on interest on savings or dividends
- a second income has not been taxed
- tax is due on pension income
- they received more tax-free allowance than they were entitled to
- the tax cannot be collected through a tax code (for example, larger amounts owed, typically £3,000 or more).
Any tax owed should be paid by 31 January 2027, unless a different date is shown.
Myrtle Lloyd, Chief Customer Officer at HMRC, said: 'If you receive a Simple Assessment letter and have tax to pay, please don't ignore it. It is quick and easy to pay any tax owed via the HMRC app.
If you need extra support or want to find out more, search 'Simple Assessment' on GOV.UK.'
Source: HMRC Website
Government announces VAT will be cut from household electricity bills
The government recently announced that VAT will be cut from household electricity bills from 1 October in time to impact the next Ofgem price cap.
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The move is part of new Prime Minister Andy Burnham's commitment to help ease the cost of living.
The cost of this immediate action for this financial year is being funded from the cancellation of the £1.8 billion Digital ID programme.
Any further action on energy bills will be taken at the Budget, alongside the publication of a forecast from the Office for Budget Responsibility (OBR). All decisions at that point will continue to be funded and also consistent with the government's fiscal rules.
The Prime Minister said: 'Westminster has not been working for people for too long, with families struggling with the cost of living.
We're taking immediate action to cut taxes on energy bills, put more money in people's pockets and bring back hope.'
Source: GOV.UK Website
HMRC reminds people with side hustles to register for self-assessment
HMRC is reminding people with side hustles that they will need to tell it if they earn more than £1,000.
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The Help for Hustles campaign aims to assist individuals with side hustles to 'get their tax right, quickly and easily'.
New entrants to self-assessment should register for the 2025/26 tax year by 5 October 2026.They must file their online tax return and pay any tax due by 31 January 2027. HMRC has an online tool to help people with side hustles to check if and when they need to report their additional income.
Kevin Hubbard, Director of Small Business and Individuals at HMRC, said: 'For many people, a side hustle is a valuable source of extra income. If you're earning more than £1,000 a year from your side hustle it's important to understand your tax responsibilities, and HMRC wants to make that as straightforward as possible.
You can check if you need to do a Self Assessment tax return by using the tool on GOV.UK.'
Source: HMRC Website
Government unlocks major finance package for small businesses
Significant reforms to small business finance have been announced by the government.
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The centrepiece of the plans is an expansion of the British Business Bank's (BBB) Growth Guarantee Scheme (GGS) which provides a 70% government guarantee on commercial loans to SMEs of up to £2 million.
The scheme will scale up to facilitate an additional £2 billion of SME lending per year by 2028/29. This will bring the total SME lending supported through the scheme to £3.35 billion per year, more than double the current £1.35 billion.
The maximum term length of a loan is also increasing from six to ten years for loans of up to £1.1 million.
In addition, the maximum size of businesses that are eligible for a loan under the scheme is rising from £45 million in annual turnover to £54 million.
The BBB estimates these changes will support an additional 12,000 businesses per year by 2028/29, a 150% increase on the 8,000 currently being supported, bringing the total to 20,000.
Louise Hellem, Chief Economist at the Confederation of British Industry, said:
'The government deserves credit for listening to business and putting forward a package that recognises the practical finance challenges firms face. The priority now is delivery and making sure the support is simple to access, well understood by businesses and effective in crowding in private capital.
If implemented well, these reforms can help more SMEs scale, export and adopt new technologies here in the UK – supporting productivity, stronger local economies and long-term growth.'
Source: HM Treasury Website, CBI Website
Government steps up drive to reconnect young people with £1.6 billion in unclaimed savings
The government is stepping up its efforts to reconnect young people with unclaimed savings in Child Trust Funds (CTFs).
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Around 6.3 million Child Trust Fund accounts were opened for children born between 1 September 2002 and 2 January 201
More than 750,000 young adults still have unclaimed matured accounts, holding £2,200 on average and totalling over £1.6 billion.
CTFs were introduced to give every child a financial asset at adulthood. However, accounts can go unclaimed for a number of reasons, including difficulty locating them, people forgetting they have them, or a decision to leave the funds invested for the time being.
The government has set up a Child Trust Fund Taskforce, bringing together CTF providers to drive a coordinated effort to increase reunification of accounts.
Members of the Taskforce will include One Family, Coutts, Nationwide, HSBC UK, Pilling, The Coventry (Co-operative), Sheffield Mutual, Unity Mutual, Forester, Healthy Investments and The Share Foundation.
Rachel Blake, Economic Secretary to the Treasury, said:
'Too many young people are missing out simply because they are not aware of where their CTF is or how to access it.
We are acting to fix that by bringing government and industry together - improving coordination and making it easier for people to find and claim what's rightfully theirs.'
Source: HM Treasury Website
Targeted subsidies are needed for firms to tackle Britain's NEETs crisis
Targeted subsidies, rather than expensive tax breaks, are the most cost-effective way of supporting employers to get young people into work, according to Resolution Foundation analysis.
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The think tanks warns that the number of young people not in employment, education or training (NEET) passed one million earlier this year. It says this is a crisis that risks scarring the living standards of a generation.
A range of solutions have been proposed to encourage firms to hire more young people. But a Resolution Foundation report shows that there is a vast gulf in their cost-effectiveness.
The report estimated that the Youth Jobs Grant, which offers firms £3,000 to hire an 18-24-year-old who has been on Universal Credit for six months or more, will create 2,800 additional jobs at a cost of around £36,700 each.
The Jobs Guarantee, which funds six months' part-time employment for those out of work for at least 18 months, comes in at roughly £38,000 per additional job, making it three-and-a half times cheaper than scrapping employer National Insurance contributions (NICs).
Lindsay Judge, Research Director at the Resolution Foundation, said:
'One million young people outside of work, education or training is a sobering milestone – the highest figure for 13 years, and a reality that risks lasting damage to the life chances of a generation. But reaching for employer tax cuts to resolve this doesn't add up.'
Source: Resolution Foundation
HMRC still has a long way to go on customer service, says CIOT
HMRC's performance data for 2025/26 shows it has made progress on customer service but still has a way to go, according to the Chartered Institute of Taxation (CIOT).
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The data shows a mixed picture with progress on compliance activity, digital adoption and HMRC's telephone service.
However, challenges remain around debt levels, correspondence handling and customer satisfaction.
The CIOT welcomed the news that HMRC has met their target of 85% of attempts to get through to an HMRC helpline adviser succeeding. This is the first time it has met their target in this area.
The CIOT also noted that HMRC has missed its other four customer experience targets.
Charlotte Barbour, Chair of the CIOT's Technical Policy and Oversight Committee, said: 'HMRC has some notable achievements in 2025/26 including record compliance yield, improved telephone performance and increased usage of digital channels. However, service levels are still below where they should be, customer satisfaction remains below target and HMRC continue to struggle with a persistently high level of tax debt.
Use of HMRC's digital channels continues to tick up but it will need an acceleration if HMRC are to hit their target of 90% of customer interactions online by 2030. It's good news that HMRC are answering their phone lines more quickly than a year ago, but it is still taking twice as long as it did in the 2010s.'
Source: CIOT Website
Prime Minister cuts business rates for pubs, clubs and music venues
Prime Minister Andy Burnham has slashed business rates for pubs, clubs and live music venues in England by 20%.
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The reduction will take effect from April 2027 and will save the typical pub an estimated £1,100 next year, according to the government.
Designed to cut costs for working people and communities, the move will benefit nearly 32,000 pubs, clubs and live music venues, the government said.
The changes will be fully funded, including through reviewing reliefs for businesses that do not make a positive contribution to local communities, such as vape shops.
Mr. Burnham said: 'For too long, governments have stood by while cherished venues have disappeared from our local high streets.
This government will back the businesses that people want to see in their communities. I said I would protect pubs and local high streets – the beating heart of our communities – and that's what we will do. What we're announcing . . . is just the start as we work to bring back hope across the country.'
Responding to the announcement, the Federation of Small Businesses (FSB) said: 'We are encouraged at the signal from the Prime Minister . . . , instructing his government to plan for a significant increase in Small Business Rate Relief at the heart of the next Budget.'
Source: HMRC Website, FSB Website
