Hello,
With the introduction of the first phase of Making Tax Digital for Income Tax (MTD for IT) less than six months away, HMRC have published guidance on how to apply for an exemption when taxpayers are considered 'digitally excluded'.
HMRC say that digital exclusion applications need to be submitted before a taxpayer is mandated into MTD for IT, and those due to join from 6 April 2026 can now apply. Do note that digital exclusion exemptions for MTD for VAT do not automatically carry over to MTD for IT, so action will be required by anyone in that position.
Last month, we covered the new advisory fuel rates applying from 1 September 2025. For the first time, these included different rates for electric cars depending on whether the charging takes place at a residential location or using a public charger. HMRC have now provided guidance on how to apportion the rates where charging takes place at both locations.
On the subject of employers, do remember that payment of Class 1B National Insurance is due this month. This will be relevant for those employers who have agreed a PAYE Settlement Agreement with HMRC for the 2024-25 tax year.
More news and updates below, including some speculation as to what we might see announced next month in the Autumn Budget.
The rossmartin.co.uk tax team
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Quick News
New MTD guidance for the digitally excluded
HMRC have published new guidance on applying for an exemption from Making Tax Digital (MTD) for Income Tax for those who are digitally excluded.
HMRC finds extra £2.4bn down VAT sofa
The Office for National Statistics (ONS) has published a correction to the Public Sector Finance figures because HMRC made mistakes in calculating VAT income. HMRC's error gives the Chancellor an extra £2.4 billion in VAT cash receipts and lowers UK borrowing by around £1bn in FYE March 2025.
What might be announced in Autumn Budget 2025?
With the Chancellor's 2025 Autumn Budget set for 26 November, and an increasingly challenging economic outlook, we consider what tax changes might be announced when Rachel Reeves stands at the Dispatch Box next month.
HMRC's 'big data' system bags £4.6bn extra
HMRC's 'big data' system, Connect, has brought in £4.6bn of additional tax in the 2024-25 tax year that would otherwise have been uncollected. The increase of 35% above the estimated average annual amount collected comes from the tax gap, says international law firm Pinsent Masons, following a Freedom of Information (FOI) request.
One-to-many letters: Tracker
HMRC's latest one-to-many 'nudge' letter campaign targets individuals who may not have declared all of their 2023-24 dividend income from UK companies on their 2023-24 self-assessment tax return.
Tax Cases
ATED relief available on option to purchase property
In Investment and Securities Trust Limited v HMRC [2025] UKUT 00331, the Upper Tribunal (UT) found that a company was entitled to Annual Tax on Enveloped Dwellings (ATED) relief as it held an option over a property exclusively for the purpose of developing and reselling that property, in the course of its property development trade.
Editor's Choice
PAYE Settlement Agreements
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Advisory fuel rates (company car drivers)
Can employees claim for mileage in a company car? What are HMRC's advisory fuel rates?
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Self-employed
Farming: Tax Overview
What is farming? What are the tax consequences and tax considerations of farming? What are the features of agricultural tenancies? What expenses can farmers claim for tax purposes? Are there special tax and accounting rules for farmers? What are the VAT rules for farmers?
Directors & Companies
Associated companies checklist
A checklist to help determine whether companies are associated for Corporation Tax.
Interest relief: Making a loan to a close company
Individuals can claim tax relief for interest paid on a loan where the funds are used by a close company or used to buy an interest in a close company. Which loans qualify? What is a business purpose?
Employers
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What is a beneficial loan? What are the tax and Benefit In Kind implications? Which loans are exempt? How is the value of the benefit calculated? How is the beneficial loan reported? What happens if the loan is written off?
Employee Shares: tax reporting for Restricted Stock Units
How are Restricted Stock Units (RSUs) reported for UK tax? How are RSUs taxed? How do I complete my tax return?
Private Client & Estate Planning
Estates: Income Tax and Capital Gains Tax
How do executors deal with income and capital gains arising from the deceased’s estate? What allowances and reliefs are available?
Negligible value claims
What is a negligible value claim? When and how can a claim be made?
Capital Allowances
What expenditure qualifies for plant & machinery allowances?
What is plant and machinery? What expenditure qualifies as plant and machinery? What is treated as part of a building?
Land & Property
Rent-a-room Relief
What is rent-a-room relief? When does it apply? What are the limits and restrictions?
Overseas & Residence
Overseas Workday Relief (OWR)
What is Overseas Workday Relief (OWR)? When does it apply? What are the recent changes to OWR?
Penalties & Compliance
Professional Conduct in Relation to Taxation
UPDATE: The Professional Conduct in Relation to Taxation (PCRT), adopted by the main professional accounting and tax bodies, sets out the professional standards that are expected of a member when undertaking tax work.
Named tax avoidance schemes, promoters, enablers
UPDATE: HMRC has published an updated list of named tax avoidance schemes, promoters, enablers and suppliers on 8 October. It is not recommended that taxpayers use any of these schemes, as HMRC do not consider that they work and you may end up with a significant tax liability if you engage with the scheme suppliers.
Sch 36 Information Notices
What is a Schedule 36 Information Notice? When can HMRC issue one? What rights does the taxpayer have when an information notice is issued? What penalties apply for a failure to respond to an Information Notice?
More Tax Guides
Private Intermittent Securities and Capital Exchange System (PISCES)
What is the Private Intermittent Securities and Capital Exchange System (PISCES)? What are the tax implications of trading shares on PISCES? What impact will there be for share schemes?
Cryptoasset Reporting Framework (CARF)
What is the Cryptoasset Reporting Framework (CARF)? When does reporting apply? What information will be collected and reported?
VAT
Groups (VAT)
What are the conditions for forming a VAT group? What rules apply once a VAT group is in place?
Tax Tools & Calculators
Tax tools & calculators
We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes.
Calendar of tax deadlines and new tax measures
This is a freeview 'At a glance' rolling calendar of common recurring tax deadlines, new tax measures and other tax-significant events.
CPD
Recent and upcoming webinars include:
- Practice Insight - October 2025 (free)
- Monthly Tax Update - September 2025
- Practice Insight - September 2025 (free)
- Monthly Tax Update - July 2025
- Practice Insight - July 2025 (free)
- Making Tax Digital for Income Tax - Roadmap to April 2026
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Missed the Last Tax Update?
Ross Martin Tax: SME Tax News 2 October 2025
- Paying the High Income Child Benefit Charge via PAYE
- Scottish and Welsh Budget dates
- New R&D tool and R&D statistics 2023-24
- One-to-many letters: Tracker
- UT denies application for late appeal, despite FTT errors
- Culinary nitrous oxide was not a food for VAT
- Corporation Tax instalment payments UPDATE
- Investment Zones UPDATE
- Direct Recovery of Debts (enforcement by deduction from accounts) UPDATE
- Digital Platform Reporting UPDATE
- Patent Box ...More
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