Welcome to the June 2026 edition of Tax E-News.

This month’s update covers increases to tax-free mileage rates, a temporary VAT reduction for certain family-focused activities, new dividend reporting requirements, developments in the R&D tax relief regime and a useful reminder on employment status following a recent football referee case.

If you would like to discuss any of the topics covered, please get in touch.

Great British Summer Savings

On 21 May 2026, Chancellor Rachel Reeves MP announced the Government’s “Great British Summer Savings” package, a series of measures designed to reduce costs for families, particularly those with children.

While the announcements are consumer-focused, two measures may be particularly relevant for businesses.

Tax-free mileage rates increase

Businesses and self-employed individuals will be able to claim tax relief on a higher mileage rate from April 2026.

A 10p per mile increase to the tax-free mileage rate for the first 10,000 business miles driven will apply for the 2026/27 tax year and will be backdated to 6 April 2026.

The increase affects the amount per business mile that qualifies for tax relief and applies to both employees and the self-employed.

HMRC’s updated mileage rates are as follows:

For the self employed:

For employees:

Note that only the rate for cars and vans for the first 10,000 miles has increased; other rates are It’s worth noting that only the rate for cars and vans covering the first 10,000 business miles has increased. All other rates remain unchanged.

What this means for you

If your business reimburses employees for business mileage, now may be a good time to review your expense policies and payroll processes to ensure the new rates are being applied correctly.

Temporary 5% VAT rate introduced

Businesses operating in hospitality, leisure and visitor attractions may benefit from a temporary VAT reduction this summer.

From 25 June to 1 September 2026, a reduced VAT rate of 5% will apply to certain qualifying activities.

The reduced rate applies to:

Children’s meals

To qualify for the reduced rate, the meal:

• Must be held out for sale as a meal for children.
• Must be supplied by a restaurant, café or similar establishment.
• Must be consumed on the premises.
• Must not be takeaway food.
• Can include drinks.

Children’s admission tickets

The reduced rate applies to admissions for:

• Cinemas
• Theatres
• Shows
• Concerts

Qualifying attractions suitable for children

This includes:

• Amusement parks
• Museums
• Heritage sites
• Zoos
• Soft play areas

The reduced rate applies to all admissions, regardless of the customer’s age.

What this means for you

If your business operates in hospitality, leisure or visitor attractions, you’ll need to ensure your systems can correctly apply the temporary VAT rate during the qualifying period.

If you’re unsure whether your supplies qualify, please get in touch.

New dividend reporting requirements for directors

HMRC is asking for more information about owner-managed businesses and the dividends paid to directors.

For taxpayers required to submit a self assessment tax return, new boxes on the 2025/26 employment pages will require additional information for every directorship held during the tax year.

The following information will need to be provided:

• Whether the company was a close company.
• The company’s name and registration number.
• Dividends received from the close company during the tax year.
• The highest percentage shareholding held during the tax year.

A penalty of £60 may apply where the required information is not provided.

It is therefore important that you notify us of every directorship held during the year.

What this means for you

If you’re a director-shareholder, it’s important to keep accurate records of dividends, shareholdings and directorships throughout the year.
Given HMRC’s increasing focus on close company dividends, now is also a good time to ensure dividend procedures are robust, lawful and fully compliant.

If you’d like us to review your dividend processes, please get in touch.

Research & Development: an update

As HMRC continues to increase scrutiny of R&D tax relief claims, businesses need to ensure claims are properly evidenced and supported.

New R&D targeted advance assurance scheme

HMRC has introduced a pilot targeted advance assurance service for Research & Development (R&D) tax relief claims.

The service is designed to give SMEs greater certainty on complex or higher-risk areas before a claim is submitted.

The scheme is available to SMEs seeking HMRC’s view on:

• Whether a project meets the definition of R&D for tax purposes.
• Whether overseas expenditure qualifies for relief.
• Whether relief is available where work is contracted from one company to another.
• Whether the company qualifies for exemption from the PAYE and National Insurance contributions cap.

The pilot will operate alongside the existing advance assurance service, which remains available only to first-time claimants.

What this means for you

If you’re planning an R&D claim and are unsure about eligibility, overseas expenditure or subcontracted activity, the new assurance service may provide valuable certainty before a claim is submitted.

R&D claim falls short at tribunal

A recent first-tier tribunal case highlights the importance of being able to clearly evidence an R&D claim.

In Beer Express Ltd v HMRC, the tribunal considered whether the company’s projects met the BEIS Guidelines for R&D.

Under those guidelines, qualifying R&D must aim to achieve an advance in science or technology by resolving genuine technological uncertainty, rather than simply improving a company’s own internal processes.

The tribunal found there was:

• No clear explanation of the technological baseline.
• No defined technological advance.
• No identified technological uncertainties.

The supporting reports were described as vague and unconvincing, providing little more than high-level descriptions.

The tribunal also highlighted the absence of input from a suitably qualified “competent professional” who could explain why the work qualified for relief.

Although the company’s director was found to be honest and credible, he did not possess the detailed technical expertise required.

When HMRC challenged the claims, the adviser who had prepared them could no longer be located, leaving the company unable to fully support its position.

The appeal was dismissed in full.

What this means for you

If you’re claiming R&D tax relief, you should be able to clearly demonstrate the technological advance being sought, the uncertainties being addressed and the role of any competent professionals involved.

Robust documentation and specialist advice are becoming increasingly important as HMRC scrutiny continues to increase.

Football referees score a win against HMRC

Employment status remains one of the most complex areas of tax.

A recent case involving professional football referees highlights why businesses need to look beyond job titles and contracts when determining whether an individual is employed or self-employed.

In Professional Game Match Officials Ltd (PGMOL) v HMRC, the First-tier Tribunal concluded that football referees engaged by PGMOL were not employees for tax purposes.

PGMOL provides referees for professional football matches. HMRC argued that match officials should be treated as employees, meaning PAYE and National Insurance contributions should have been applied to match fees.

The case had already been considered by multiple courts.

The Supreme Court confirmed that when a referee accepted a match appointment, there was sufficient mutuality of obligation and a framework of control. However, it sent the case back to the First-tier Tribunal to determine overall employment status using a broader assessment.

The Tribunal considered the overall relationship between PGMOL and the referees and identified several key factors:

• PGMOL was not required to offer matches and referees were not required to accept them.
• Referees had a high degree of flexibility and could decline appointments or withdraw without sanction.
• Each appointment represented a separate and limited engagement.
• Refereeing was generally carried out alongside other full-time work.

Taking all factors into account, the Tribunal concluded that the relationship did not have the characteristics of employment.

As a result, the referees were considered self-employed and PGMOL was not required to operate PAYE or account for employer National Insurance contributions on payments made to them.

What this means for you

Employment status decisions should never be based on a single factor. The reality of the working relationship will always be important.

If your business engages contractors, consultants or other non-employees, it may be worth reviewing those arrangements to ensure they remain appropriately structured and compliant.

If you’d like support reviewing employment status, we’d be happy to help.

P11D deadline

The deadline for filing the P11D forms to report benefits in kind in respect of directors and employees for 2025/26 is Monday 6 July 2026. Forms P11D and P11D(b) returns must be submitted online through one of the following: PAYE Online for Employers, PAYE Online for Agents or payroll software that is recognised by HMRC. Even if all benefits have been payrolled, a form P11D(b) must still be submitted to HMRC by the deadline to show the total of all benefits.

ERS deadline

The deadline for filing annual Employment Related Securities (“ERS”) returns is Monday 6 July 2026 and applies to all UK employees or directors who hold shares, securities, or options by virtue of their employment. HMRC don’t issue filing reminders and missing the deadline may result in late filing penalties for employers.

Any shares issued or options granted to/exercised by/cancelled/released/lapsed/retained on leaving employment to current, former, or prospective employees, directors, or other people by virtue of their employment in the 2025/26 tax year must be reported and the information to be reported will depend on the type of share scheme.
Read more

Property tax newsletter

This month we look at the ongoing impact of the Renters’ Rights Act, a welcome update on SDLT concerns for periodic tenancies, and whether holiday lets remain an attractive option for landlords considering alternatives to traditional buy-to-let.
Read more

 
DIARY OF MAIN TAX EVENTS

JUNE / JULY 2026

Content accurate as of 01.06.26