Agent Update 140: February 2026

HMRC have published their Agent Update for February 2026. We have summarised the key content, including Annual Tax on Enveloped Dwellings (ATED) reporting, changes to the process of reporting Trusts Capital Gains Tax (CGT), Benefit In Kind (BIK) reporting and an update on the new tax adviser registration rules.

agent update

Submit your clients' 2026-27 Annual Tax on Enveloped Dwellings (ATED) returns

Check to see if your client is required to file a tax return for ATED.

  • ATED is a tax on companies and other corporate bodies that own UK residential properties valued at more than £500,000.

The next ATED chargeable period is 1 April 2026 to 31 March 2027.

  • For properties held on 1 April 2026, returns for this period must be filed and any charge paid by 30 April 2026.

When preparing to submit a client's 2026-27 ATED return, the same login details must be used that were used to set up the account. 

  • Make sure clients regularly log in to their Government Gateway account.
    • If they do not sign in for three years, their account details will be deleted, and they will not be able to access their account anymore.
  • Agents can begin populating an online ATED return for 2026-27 from around mid-March 2026, but it cannot be submitted before 1 April 2026.
  • For agents who cannot use the ATED online service, further information on how they can submit their client's returns can be found in the Annual Tax on Enveloped Dwellings: Return Notice.
  • ATED returns must be submitted on the correct return form.
    • Returns submitted on out-of-date forms will not be accepted, which may result in late filing penalties being charged.

If a client has disposed of a property, or later disposes of a property, agents should submit an amended return or contact HMRC to tell them about this change.

  • You should also contact HMRC if a client has had a change in their circumstances. For example, they no longer need to file a relief return. 

See Annual Tax on Enveloped Dwellings (ATED)

Upcoming State Pension age changes: impact for individuals and payroll

From 6 April 2026, the State Pension age for men and women will increase from 66 to 67.

  • The increase will be phased in over the course of two years, meaning that people born between 6 April 1960 and 5 March 1961 will reach their State Pension age at 66 years and a specified number of months. 

The State Pension age calculator can be used to find the date when an individual will reach State Pension age. 

Employers with employees born between 6 April 1960 and 5 March 1961 should check the date at which individuals reach State Pension age so they can update their National Insurance (NI) rates and categories and issue the category letters at the correct time.

  • This is the first payment date after they have reached State Pension age.
  • Employers must carry on reporting the original category letter year-to-date information separately from the updated category letter information until the end of the tax year, as they would for any other mid-year category letter change.

See State Pension Age

Student loans: reminder of new Plan 5 for 2026-27 tax year

Agents are reminded that from 6 April 2026, a new student loan plan type, Plan 5, will be introduced into repayment for the first time.

  • Plan 5 will be operated and collected in the same way as the current plan types 1, 2 and 4.

Payroll agents or employers will begin receiving student loan start notices in March 2026 for all borrowers due to enter repayment from April 2026, and include all new Plan 5 borrowers.

  • The start notice will indicate the loan and plan type which should be collected.

As communicated in the December 2025 Employer Bulletin, the starter checklist, both online and PDF, will be updated in March 2026 to include Plan 5.

  • Payroll agents and employers are encouraged to advise any employees who do not know what plan they are repaying that they can find out by logging into their online student loan account. 
  • Until 5 April 2026, when employers are still uncertain what plan to use, they should use Plan 1 until a start notice is received.
    • From 6 April 2026, this default plan will change to Plan 5.
  • Where employees have selected, or indicated that they have, more than one plan type, payroll agents should start deductions using the plan with the lowest repayment threshold. 

Ahead of the guidance being updated on 6 April 2026, when the changes take effect, payroll agents are also reminded that the new annual thresholds will be:

  • Plan 1: £26,900.
  • Plan 2: £29,385.
  • Plan 4: £33,795.
  • Plan 5: £25,000.
  • Postgraduate loan: £21,000.

Deduction rates from 6 April 2026 for Plans 1, 2, 4 and 5 remain at 9%, and the postgraduate loan remains at 6% for any earnings above the respective thresholds.

See Student Loans

Trust reporting Capital Gains Tax (CGT): process change and GOV.UK guidance updates

HMRC have updated their guidance about the reporting of CGT for Trusts.

  • Trusts that are required to report CGT on UK property must now be registered with the Trust Registration Service (TRS) before creating a 'CGT on UK property' account or submitting a paper return. 
  • Any overpayment of CGT after submitting a Self Assessment return will be automatically offset against other Self Assessment charges.
    • Any remaining CGT overpayment will need to be claimed by phoning HMRC, as this will not be repaid automatically.

Once a Self Assessment return has been submitted, there is no need to amend any previous reports for that tax year made using the 'CGT on UK property' account.

If a taxpayer is not a UK resident, they must report disposals of UK property or land even if they:

  • Have no tax to pay on the disposal.
  • Have made a loss on the disposal.
  • Are registered for Self Assessment.

Disposals should be reported using the online 'CGT on UK property' account.

See At a glance: Reporting CGT when & how?

Payrolling Benefits In Kind (BIKs): important dates

Agents will play an important role in supporting clients to prepare for the move to reporting BIKs in real time from April 2027.

HMRC are reminding agents of an important deadline as part of preparations for reporting BIKs in real time, as outlined in the interim guidance.

  • This guidance, published alongside the Autumn Budget 2025, helps stakeholders understand the upcoming changes and prepare for the mandatory payrolling of most BIKs, which you must do from April 2027.
  • Guidance will be updated regularly to include further details.

Voluntary payrolling deadline 5 April 2026

  • The deadline to register for voluntary payrolling of BIKs in the 2026-27 tax year is 5 April 2026.
  • Agents should support their clients wishing to payroll BIKs for the first time to make sure they complete the registration process before the start of the next tax year.
    • Voluntary registration is not possible once the tax year has begun. 
  • From 6 April 2026, the current voluntary registration tool will close. 
    • This change reflects the move to mandatory payrolling for most BIKs from the 2027-28 tax year onwards.
    • Under the new process, most employers will not need to register for voluntary payrolling because payrolling will be mandatory for most BIKs. 

Mandatory payrolling of BIKs and expenses:

  • HMRC continue to work closely and discuss the changes with stakeholders to ensure they are clear, practical and as easy to implement as possible.
    • Further updates to guidance will be issued based on feedback.
  • To help businesses get ready, interim guidance and technical specifications have been published much earlier than usual. 
    • HMRC will provide more details as they continue to develop policy and receive feedback.

Loans and living accommodation

  • The guidance also sets out additional plans to make payrolling of employment-related beneficial loans and living accommodation a voluntary process in the 2027-28 tax year.
  • Agents are advised to notify their clients of the forthcoming new registration service, which will be available to employers who choose to voluntarily payroll employment-related beneficial loans and living accommodation. 
    • Registration details will be provided later this year. 
    • Further updates will be provided in due course. 

See Mandatory payrolling of benefits from April 2027: Briefing and Payrolling of benefits

Gambling Duty changes for 2026

As announced at Autumn Budget 2025, the rate of Remote Gaming Duty will be increased from 21% to 40% from 1 April 2026.

  • Where this date falls part-way through an accounting period, the increased rate will only apply to the profits that arise between 1 April 2026 and the end of that accounting period.

Bingo Duty will be abolished with effect from 1 April 2026.

  • Bingo Duty operators will not need to submit returns for periods on or after 1 April 2026.
  • Businesses registered for Bingo Duty will continue to be able to submit any outstanding returns online until April 2030 and notify HMRC of any over or under-declarations from previous accounting periods. 

Relevant guidance will be updated from April 2026.

Changes to the claims process for the Creative Industries tax reliefs and expenditure credits

Starting 6 April 2026, all Creative Industries tax relief or expenditure credit claims must include the new CT600P page with the CT600 company tax return. 

  • Companies must complete CT600P alongside the CT600 and submit them at the same time.

HMRC are aware of a small validation issue affecting some companies filling out the CT600P. 

  • It will not affect the validity of companies' claims.
  • Instructions for resolving the issue will be provided shortly on the CT service issues page. 
  • HMRC will update the service in April 2027 to fix the issue.

Companies must also complete an Additional Information Form to support their claim for claiming the tax reliefs or expenditure credits in support of their claims, before or on the same day as submitting their tax return. 

  • HMRC will release an updated version of the additional information form on 6 April 2026 to coincide with the introduction of the CT600P and eliminate duplicate information. 
  • HMRC's guidance manuals will be updated on 6 April 2026 to refelct this. 

See Creative Industries Zone

Update on the National Insurance Contributions (NICs) relief for hiring veterans

At Autumn Budget 2025, the government announced the final extension of the employers' NICs relief for hiring qualifying veterans.

  • The relief will continue for two more years from April 2026 until April 2028.
  • During that time, employers will not pay employer NICs on earnings up to the veterans upper secondary threshold (£50,270) for the first year of a veteran's civilian employment. 

See Employers' NICs relief for veterans

Charity compliance: changes to the charity tax relief rules

From April 2026, the government will introduce changes to the rules on tainted donations, approved charitable investments and attributable income. 

  • These changes will affect all charities, Community Amateur Sports Clubs (CASCs) and donors, and the agents and intermediaries who support them.

The tainted donations rules will move from a motivation-based test to an outcome-based test. 

  • This will ensure that donors do not receive any financial benefit, direct or indirect, from giving to charities or CASCs.
  • The test of 'financial advantage' will change to 'financial assistance', lowering the threshold for determining whether a donation is tainted.

The government recognises 12 investment types for charitable tax relief. 

  • All 12 will now need to meet a single condition.
  • The charity must make the investments for its own benefit and not for tax avoidance by any party.
  • This update simplifies inconsistencies across the existing rules and prevents misuse of charitable investment reliefs for tax avoidance.

The definition of attributable income will now include legacies.

  • As legacies may have already benefited from Inheritance Tax relief, charities and CASCs will need to use legacy funds for charitable purposes to avoid a tax charge. 
  • This aligns the treatment of legacies with existing treatment of residual estate income and ensures charities direct legacy funds to their charitable purposes. 

These changes aim to prevent misuse of charitable tax reliefs and as such agents and organisations should now:

  • Review donation structures and investment arrangements to ensure they meet the new rules.
  • Identify, monitor and record legacy income and make sure legacy funds are used for charitable purposes.
  • Prepare for updated guidance that HMRC will publish in April 2026.

See Other Gifts to Charity

Statutory Sick Pay (SSP) changes: what this means for you

From 6 April 2026, the Employment Rights Act 2025 introduces two important changes to SSP. These changes may affect the client queries that agents handle.

  • Removal of the Lower Earnings Limit (LEL): all eligible employees will be entitled to SSP regardless of income.
    • SSP will be paid at 80% of normal weekly earnings or the uprated weekly flat rate of £123.25, whichever is lower. 
  • Removal of the waiting period: SSP will be paid from the first full day of sickness absence, and not from day four. 

The relevant legislation will apply depending on when the sickness absence took place.

  • Absences that start before 6 April 2026 will follow the current system to determine eligibility and payment. 
  • Absences that start on or after 6 April 2026 will use the new rules, unless otherwise outlined in legislation. 
  • These changes apply across the UK, including Northern Ireland.

Agents should be aware that clients may ask about eligibility and payment dates, especially around April 2026.

  • Agents should explain that employers are responsible for operating SSP and ensuring their payroll systems are updated. 
  • HMRC have already shared technical guidance, including on transitional protections, with software developers and payroll providers to support preparation. 
  • Agents can advise employers to speak to their payroll provider about readiness for these changes.

Guidance on SSP for employers and employees will be updated in due course. 

From 6 April 2026, up to 1.3 million more low-paid employees will qualify for SSP, and all eligible employees will be paid from their first full day of sickness absence, not from day four.

  • This makes SSP more accessible and removes barriers for lower-paid employees.
  • This is likely to increase client contact, particularly around eligibility and start dates.

Agents should be aware of the changes and important dates which will be in the new guidance to be released shortly.

  • This will assist with any questions after the guidance becomes effective on 6 April 2026.

See Statutory pay entitlement: directors and other employees

Updated guidance to support Research and Development (R&D) investment in the creative sector

HMRC have updated their Corporate Intangibles Research and Development Manual with illustrative examples on R&D tax relief and conditions to be satisfied to help businesses understand when creative interdisciplinary projects qualify for R&D tax relief.

  • This clarifies that the costs associated with arts-related roles and activities may qualify where they directly contribute to resolving scientific or technological uncertainties.

This update does not widen the definition of R&D or expand the scope of eligible activities, but will support businesses and advisers to make informed decisions when claiming R&D relief.

  • It reinforces the government's commitment to confirm certainty and stability in the R&D regime, to unlock innovation funding and support growth.

See Research & Development Tax Reliefs

Deferred remuneration: Income Tax guidance for internationally or globally mobile employees

HMRC have published New guidance to clarify the tax treatment of individuals in the following circumstances:

  • They earned employment income while resident in the UK for tax purposes.
  • A portion of this income related to employment duties performed outside of the UK.
  • The income was paid when the employee was no longer resident in the UK.
  • The new country of residence has a Double Taxation Agreement with the UK.

HMRC sets out best practice for sharing group structure

A new Guideline for Compliance (GfC) is now available for you to review.

  • HMRC published the guidelines to assist taxpayers with communication of their group structure and transactions to HMRC.
  • Clarity on the group structure and transactions aids in understanding of the UK tax consequences for Corporation Tax, VAT and Custom Duties.
  • The aim of the new guidelines is to avoid misunderstandings, saving time and resource as well as supporting collaborative working.

The guidelines clarify five important pieces of information that are needed from the taxpayer to understand the group structure:

  • Entity type, e.g. partnership, company, trust etc.
  • Name of entity.
  • Ownership.
  • Place of tax residence and place of incorporation, where this differs.
  • Special characteristics such as, hybrids.

The guidelines are not mandatory, and agents should seek to use information already available, which can easily be adapted to meet HMRC's best practice.

  • The aim of the guideline is to set out HMRC's understanding of standard notation and avoid misunderstanding. 
  • This approach aims to foster trust in HMRC's compliance efforts among taxpayers. 

See Groups

Getting ready for Making Tax Digital (MTD) for Income Tax now

MTD for Income Tax represents a transformative step forward for agents and their clients.

  • As we move closer to the 6 April 2026 start date, it is critical that agents take steps to get ready now.
    • Agents should review your current clients' tax affairs and sign up those who will need to use MTD for Income Tax from April 2026 based on their 2024-25 tax return.

Throughout February and March 2026, HMRC will continue to write to taxpayers to inform them that they should use MTD based on the details provided in their 2024-25 tax return. 

  • These taxpayer letters include a line asking taxpayers to contact their agent if they have one. 

Part of being ready is to sign up your clients for MTD, but you will need an Agent Services Account (ASA).

See Making Tax Digital

Getting ready for MTD: an agent toolkit

A new MTD agent toolkit has been published to help agents get ready.

  • This toolkit has been developed in partnership with Senga Prior from the Association of Taxation Technicians (ATT) during her secondment to HMRC.

The toolkit includes:

  • Content to help agents understand the changes.
  • Advice on preparing their practice and their clients. 
  • Links to helpful resources, including YouTube videos, the agent outreach support service and a range of MTD webinars. 

HMRC also provides additional resources to help you get ready: 

See MTD: Toolkit for accountants

Protecting contractors from tax avoidance

If your clients are contractors working through umbrella companies, you should share HMRC's new 'Don't Get Caught Out' campaign to help protect them from tax avoidance schemes.

Clients can make informed and compliant choices by using HMRC's:

  • Online guides to learn how to spot tax avoidance schemes.
  • Interactive tools to check payslips and contracts to confirm the right amount of tax is being paid. 
  • Real-life stories of people caught out by tax avoidance.
  • An explainer YouTube video on how umbrella companies work and the risks to contractors.
  • Signposts for how to get help and support to report or leave a scheme.

Contractors can also review HMRC's published named tax avoidance schemes and their promoters. 

  • This is not an exhaustive list and HMRC never approves such schemes. 

Closure of the service to file company accounts and tax return

The online filing service used to file company accounts and tax returns will close on 31 March 2026.

  • The service can still be used to file and amend company tax returns with HMRC, and accounts with Companies House, up to and including 31 March 2026.

From 1 April 2026, businesses will need to use commercial software to file annual accounts and company tax returns with HMRC.

The service is to support small, unrepresented businesses with simple tax affairs where their online filing does not meet modern digital standards, or recent changes to UK company law. 

  • Since online filing for Corporation Tax was introduced in 2011, the market has matured and grown. 
  • Commercial products can offer much more than the current service, such as improved validation and tax support and reminders. 

Closure of the service will not directly impact tax agents, as the service is specifically for unrepresented businesses. 

  • Closure of the service may prompt impacted businesses to seek professional advice on how to meet their Corporation Tax obligations.

Important points for agents to know:

  • Filing exemptions: some businesses may be eligible to apply for a Corporation Tax filing exemption.
  • Alternative filing routes: a paper Corporation Tax return may be submitted where a taxpayer has a reasonable excuse or chooses to file in Welsh. In all other cases, businesses must file online,
  • Commercial software: HMRC publishes a list of commercial software suppliers that can produce one or more elements of a company tax return. HMRC accepts returns filed using any of the suppliers listed. 

Bereavement-related contacts: a reminder

If you need to contact HMRC regarding a deceased taxpayer's Self Assessment, PAYE, or Child Benefit matter, you can call the bereavement helpline on 0300 322 9620.

  • Do not use the agent's dedicated line for these matters, as all calls will be directed to the bereavement helpline.
    • This process may result in delays in addressing your inquiry and inconvenience for both agents and advisers.

Tax code changes for winter payment recovery

Individuals in England, Wales and Northern Ireland receiving Winter Fuel Payments, or in Scotland receiving the Pension Age Winter Heating Payment, with income over £35,000 will have their payment recovered by HMRC through the tax system.

  • Recovery for payments made during the 2025-26 tax year will start in April 2026.

From April 2026, HMRC will automatically collect payment by adjusting your client's tax code, unless they currently file a Self Assessment tax return.

  • No further action or contact with HMRC is required on their part.

Be aware that in February 2026, your clients may receive a tax code notification for the 2026-27 tax year, which will not reflect adjustments for their winter payment.

  • No action or contact with HMRC is required.
  • An updated tax code reflecting the recovery of their winter fuel payment will be sent in early April 2026

Your clients who file a Self Assessment return will need to include the 2025 winter payment on their 2025-26 tax return.

  • For online filers, where possible, HMRC will automatically include the winter 2025 payment on their Self Assessment return, which is due by 31 January 2027.
    • Clients should check that their winter payment is on their online return and include it themselves if not. 
  • Paper filers will need to include it on their return, which is due by 31 October 2026.

If your clients expect their individual total income from their private pension, state pension and any other sources to be over £35,000, they can opt out of future payments rather than have HMRC tax them back.

See Winter Fuel Payment recovery, Scottish Winter Heating Payment recovery and How to check your PAYE Code

Self Assessment: thank you and well done

HMRC have sent a huge thank you to tax agents for your hard work throughout the Self Assessment period. 

  • Your support has once again enabled millions of taxpayers meet their tax obligations.

This year, 11.48 million taxpayers filed their tax return by the 31 January deadline, with agents submitting over 6.5 million of these.

  • This is a fantastic achievement that reflects the vital role you play in guiding and supporting taxpayers.

For taxpayers who did not meet the deadline, continue to encourage your clients to file their tax returns and make payments as soon as possible to reduce potential penalties and interest.

See Adviser's Tax Penalty Planner

Additional information for VAT service enrolment

As part of HMRC's enhanced security of controls for VAT, some taxpayers are now required to provide additional information when enrolling the VAT service in their business tax account. 

  • Taxpayers may be asked for their application reference number, which they receive during the VAT registration process.

To help protect against fraud, HMRC strongly advise that all businesses registering for VAT should enrol the VAT service onto their business tax account as soon as they receive their VAT registration number.

HMRC guidance on the new tax adviser registration rules: an update

HMRC published guidance on the new registration requirement for tax advisers who interact with HMRC in relation to their clients' tax affairs.

  • Most tax advisers will need to register from 18 May 2026, although some businesses will be given more time. 

The new guidance explains who must register, when they need to register and what information they must provide.

  • Tax advisers who register will need to meet HMRC's registration conditions set out in the guidance. 
  • Registration will be completed through a new digital process to simplify and reduce the administrative burden of registration.

The new requirement will raise standards for tax advisers who interact with HMRC on behalf of their clients. 

  • This will help protect taxpayers from advisers who are not fit to act and supports a fairer market for taxpayers and advisers who play by the rules. 

HMRC will continue to engage with stakeholders and further guidance will be published ahead of 18 May 2026.

See Mandatory tax advisor registration with HMRC

Voluntary NICs abroad

In Autumn Budget 2025, the government announced changes to voluntary NICs for periods abroad. From April 2026 for tax years 2026-27 onwards, the option to pay voluntary Class 2 NICs for periods abroad will be removed. 

  • New Class 3 NICs applications for periods abroad will require 10 years' continuous UK residency or NICs.

If agents have clients who work abroad, inform them of the changes coming into effect from April 2026 and equip them with the knowledge they need to make informed decisions.

If your clients currently pay Class 2 NICs abroad:

  • HMRC will write to them from July 2026 if they are affected.
  • If they pay by Direct Debit, they should not cancel it.
    • HMRC will collect their final payment for the 2025-26 tax year on 10 July 2026.

The changes do not affect the ability of anyone to purchase voluntary NICs for tax years before 2026-27.

Further details and guidance will be published at a later date.

The changes aim to make sure that people building a State Pension from outside the UK have a strong enough connection to the UK and are paying an appropriate, fair price.

  • A broader review of voluntary NICs policy is planned to ensure the system is fair and fit for purpose. 

See Globally mobile employees: National Insurance

Webinar Recording: Transfer of Assets Abroad (ToAA), HMRC's approach to the motive defence

The webinar offers an overview of the ToAA exemptions, commonly referred to collectively as the 'motive defence' and provides:

  • A brief background on the ToAA legislation.
  • An overview of the various exemption provisions, highlighting common misconceptions.
  • HMRC's approach to the exemptions.
  • Examples of the exemptions.
  • Guidance on how to apply for an exemption from a ToAA charge,

The webinar assumes that you have a reasonable working knowledge of the ToAA legislation in broad terms, as it only covers the exemptions and not the conditions that must be present for a ToAA charge to arise. See Transfer of Assets Abroad (ToAA)

Read more on HMRC email updates, videos and webinars for tax agents and advisers

Efficient processing of 64-8 forms: updating your tax agent contact details with HMRC

The processing of a 64-8 may be delayed if there are inconsistencies in the details provided. 

  • Agents are reminded to check their ASA for designatory detail updates before submitting a 64-8 for processing. 
  • Agents should use 'Check when you can expect a reply' from HMRC to find out the anticipated response times for their enquiries or requests. 

Preventing loss of access to HMRC online services when an account administrator leaves

When an administrator is leaving the business, it is best practice for the remaining administrator to log into the account, select 'your account', then select 'manage team access'.

  • This will give them the option to both remove a team member and add a new one. 

If the only administrator on the account is leaving, they should log in before they leave and add a new administrator first, then the new administrator can remove the departing administrator once they are sure they have access.

  • In situations where this is not possible, the agent should contact HMRC's online services helpdesk who will treat it as an absent administrator and reset access after security checks.

Another benefit of multiple administrators on the account is that they can reset other users' access if the login details or phones are lost.

  • Agents are reminded to keep an accessible record of the administrators appointed, as this will be required to reset the account.

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Issue 140 of Agent Update