Change is constant in business – and it’s the ones who adapt early that stay ahead.

The Government’s latest statement revealed 39 new measures aimed at modernising the UK tax system. While many are rooted in simplification and digitisation, there are some important implications for business owners and employers. Here are five that caught our attention:

Mandatory payrolling of benefits – now April 2027

The move to mandatory payrolling of benefits in kind has been pushed to April 2027 from its originally planned date of April 2026. Payrolling benefits is a way to report and tax employee benefits through the payroll system, rather than submitting them at the end of the tax year via form P11D. Currently, employers can voluntarily choose to payroll benefits ahead of the mandatory implementation. Find out more in our Payrolling BiK blog.

VAT Capital Goods Scheme: simplification on the horizon

For businesses investing in high-value assets like buildings or equipment, the VAT Capital Goods Scheme can be a complex area – especially when usage shifts between taxable and exempt activities.

While we’re still waiting on a firm date, new legislation is expected to remove computers from the scheme altogether. More significantly, the threshold at which the scheme kicks in for land, buildings and civil engineering works will rise from £250,000 to £600,000 (excluding VAT).

This will be a welcome simplification for affected businesses.

CEST tool gets a refresh – but not a revamp

HMRC’s Check Employment Status for Tax tool has been updated for usability. But the way it determines status remains unchanged. And therein lies the risk. It’s not always accurate. If in doubt, get a second opinion before making decisions that affect IR35 and your workforce.

VAT on donations to charity – consultation opens

The Government is exploring a fairer approach to how donated goods are treated from a VAT perspective. If your business donates to charity, now’s the time to pay attention. The balance will be between easing the process for donors and protecting the system from abuse. The consultation is available to view here.

Goodbye envelopes, hello inboxes

HMRC expects to save £50m a year by 2028–29 by reducing paper correspondence. The shift to digital is picking up pace, so expect fewer letters through the door. Critical communications will still arrive in paper form, but we’re entering a new normal – faster, leaner, greener. Promises have been made not to abandon those who are unable to access correspondence by digital means.

If any of these changes affect you – or you’re unsure what they mean in practice – our team is on hand. Don’t get tangled in tax tape. Let’s talk.

To review the Exchequer Secretary’s statement in full, please see here.