What's in the news this month - April 2026

The government has confirmed it will review approved mileage rates for business users ahead of a future Budget.

The announcement comes after more than a decade without change – despite rising fuel, insurance and maintenance costs leaving many workers covering the gap themselves.

Rachel Reeves, the Chancellor of the Exchequer, highlighted the issue earlier this month, recognising that approved mileage allowance payment rates have not changed since 2011 even as motoring costs have evolved significantly.

The government says the workers-first review will focus on people who rely on their car to do their job, ensuring ‘they are not left out of pocket’. As part of this, the government says it will meet with people struggling with increased costs to inform this review as it develops.

In the meantime, the government says wider action is being taken to support people with the cost of living and keep prices down at the pump, including by freezing fuel duty until September.

Dan Tomlinson, Exchequer Secretary to the Treasury, said:

‘Millions of working people rely on their car to do their job. But mileage rates have been unchanged since 2011 and that’s increased the cost of working. A review is well overdue.

‘Keeping prices down at the pump is an important way we can help people with the cost of living which is why fuel duty is already frozen.’

Internet link: GOV.UK

The start of the new tax year on 6 April 2026 will bring contentious changes with it, warns the Chartered Institute of Taxation (CIOT).

The most controversial change is the taxation of dividends and employee benefits as well as the introduction of Inheritance Tax (IHT) on family businesses and farms.

The government’s Making Tax Digital for Income Tax programme will require most sole traders and landlords with income of more than £50,000 a year to keep digital records and make quarterly submissions to HMRC.

Over the next three tax years HMRC plans to bring 2.9 million self-assessment taxpayers into the programme, requiring them to use compatible software to keep digital records and submit quarterly updates and an annual return.

Most of the changes take effect on Monday 6 April, the start of the new tax year, though a few changes will be in place from Wednesday 1 April.

Ellen Milner, CIOT Director of Public Policy, said:

‘Spring is a time of fresh starts, and for taxpayers it also marks the arrival of a new tax year and new tax rules.

‘The most contentious change being made this April is bringing business and agricultural assets into the scope of IHT, albeit with an additional allowance and being taxed at a lower rate. This will mean many more valuations of estates will be required. Farmers and business owners potentially in scope will need to pay careful attention to their tax planning.’

Internet link: CIOT website

Small businesses to be backed by new, stronger measures to tackle late payments, the government has announced.

The Small Business Commissioner will be given sweeping new powers to investigate poor payment practices, adjudicate payment disputes, and fine the worst offenders – with fines worth tens of millions for firms that persistently pay late or fail to comply with the new laws.

The government says the measures will tackle a problem costing the UK economy £11 billion every year.

The changes will include a new 60-day cap on payment terms on all large firms when paying smaller suppliers. New mandatory interest on late payments will also be introduced, with a requirement for all commercial contracts to include statutory interest set at 8% above the Bank of England base rate.

Business Secretary Peter Kyle said:

‘Far too many businesses are forced to shut down because they have not been paid – that is simply unacceptable.

‘We are unveiling the strongest, most robust changes to payment laws in over a generation – laws that will transform the fortunes of small businesses for years to come and make their day to day lives much easier.’

Internet link: GOV.UK

The government’s new procurement rules that target opportunities for smaller businesses offer hope to SMEs, according to the British Chambers of Commerce (BCC).

Government departments have, for the first time, set individual spending targets for SMEs to deliver over £7.4 billion a year to small businesses by 2028.

Departments have for the first time, individually set direct SME spending targets and will publish yearly progress updates ensuring they are held to account, those who fall behind will need to set out robust actions on how they will improve.

In 2024, the BCC and Tussell’s SME Procurement Tracker found only 20% of direct procurement spend from the wider public sector, including central government, went to SMEs.

Jonny Haseldine, Head of Business Environment policy at the BCC, said:

‘This shake up is long overdue as public procurement spend with SMEs has been stuck in a rut. Although the value of contracts with SMEs has continued to rise their slice of the pie is still far too small. For too many businesses, government contracts remain out of reach.  

‘This new scheme has the potential to be a game changer, giving smaller firms across the UK greater access to procurement opportunities and supply chains. 

‘As has been demonstrated by Chamber-led supply chains at major infrastructure projects such as Sizewell C and Hinkley Point, SMEs are a vital part of the ecosystem. They provide local skills and knowledge to projects as well as significantly boosting regional economic growth.’

Internet link: BCC website GOV.UK

The government’s proposed tourist tax would constitute a £1.6 billion tax increase for holidaymakers, according to analysis by Oxford Economics.

The modelling, which was commissioned by UKHospitality, assumed a 5% levy is fully realised by 2030.

It showed a £2.2 billion reduction in GDP, £1.6 billion tax bill for UK holidaymakers, £688 million in reduced tax receipts for the Treasury and a loss of £101m in direct investment from hospitality and tourism businesses.

The modelling by Oxford Economics also considered a £2 levy per person per night and a £2 levy per room per night. All scenarios resulted in a reduction in GDP, tourism spending, nights spent in accommodation and total jobs.

Allen Simpson, Chief Executive of UKHospitality, said:

‘The numbers are clear. A holiday tax would hike costs for Brits, make staycations more expensive and decimate tourism.

‘There are no winners from a holiday tax. From coastal communities and city centres to local guesthouses, pubs and taxi firms, the impacts are stark and indiscriminate.

‘Taxes up, jobs lost and our high streets hit once again. Holidays are for relaxing, not taxing. The government should keep it that way and stop the holiday tax.’

Internet link: UKHospitality website

There is now less than a year to go before all employers must tax benefits-in-kind via the payroll, the Chartered Institute of Taxation has warned.

Benefits-in-kind are non-cash benefits provided by employers to employees or directors. Common benefits include company cars, private medical insurance and gym membership.

While the benefit is paid for by the employer the recipient is required to pay Income Tax and potentially National Insurance contributions (NICs) on the value of the benefit, as if this value had been added to their salary.

Additionally, the employer must pay employer NICs on the value of the benefit. According to HMRC more than 3.5 million employees receive a taxable benefit-in-kind.

Currently, most employers compute the value of a taxable benefit after the end of the tax year and report it on a P11D form to HMRC and the employee. This means the employer potentially has up to 15 months to calculate, verify and report the value of a benefit.

From 6 April 2027 it will be a legal requirement to report and pay Income Tax and NICs on most benefits-in-kind and taxable expenses payments via payroll rather than waiting until the end of the tax year.

Sarah Hewson, Vice-Chair of the CIOT’s Employment Taxes Committee, said:

‘Mandatory payrolling of benefits will have a big impact on employers, employees and software providers. Don’t leave it too late to get ready for this change.’

Internet link: CIOT website

Higher energy prices due to the conflict in the Middle East are set to make the median working-age British household £480 worse off this year, according to the Resolution Foundation.

The think tank based its estimates on market-forecasts for the rise in energy prices consistent with market pricing after the announcement of a ceasefire.

For families with above average income, rising energy prices will likely tip living standards growth into negative territory, says the Foundation.

The typical household, previously on track for 0.9% growth, is now set to see its income fall by 0.6% – a difference of £480 – over the course of the current financial year.

It says that average income growth for the poorest fifth this year is now set to be just 1.2%, down from 2.8% before the conflict.

James Smith, Chief Economist at the Resolution Foundation, said:

‘Despite hopes for a sustained peace, the path of this conflict remains uncertain and energy prices remain well above pre-war levels, meaning many households face a decline in their purchasing power this year.

‘This squeeze will run right through the income distribution. Lower-income households will still see some income growth thanks to a long-awaited rise in real benefit levels, but inflation will likely knock more than a percentage point off what they stood to gain.

‘For those in the middle and towards the top of the income distribution, even the thin growth they had been expecting has tipped into negative territory.’

Internet link: Resolution Foundation website