Hello,
To support the hospitality sector and help families with the cost of living, the Chancellor has launched the ‘Great British Summer Savings’ scheme, which sees a temporary cut in the rate of VAT from 20% to 5% for children’s meals in restaurants, children’s cinema, theatre, show and concert tickets, and admission to other attractions suitable for families with children such as soft play, adventure centres, and theme parks.
The reduced rate of VAT will apply between 25 June and 1 September 2026. With less than a month until it comes into effect, this may present affected businesses with several challenges, including accurately identifying the supplies that will be impacted, ensuring cut-off issues are dealt with, and addressing the need to update pricing processes, systems and tills, etc.
To assist accountants in communicating the changes with their clients, this week we are giving rossmartin.co.uk subscribers Exclusive one-off access to 20:20 Innovation's client newsletters which cover the announcements: Tax E-news and Business News. To further help you and your team advise clients on the changes, we will also be talking through the detail in our Monthly Tax Update - June 2026 webinar, which is priced at £99+VAT.
To address rising fuel prices, the Chancellor also announced that the 45p per mile employee Approved Mileage Allowance Payment (AMAP) rate for cars and vans will be increased to 55p per mile from 6 April 2026. No changes were announced to the 25p rate for travel over 10,000 miles, or to the motorcycle, bicycle, or passenger payment rates.
The same 10p per mile increase will also apply to the previous 45p rate used by some self-employed individuals under the simplified expenses regime, meaning that for the first 10,000 qualifying business miles, tax relief on 55p per mile can be claimed for cars and goods vehicles in 2026-27.
While this 10p increase will be welcomed by employees and the self-employed, it may also present challenges to some employers, who should now review existing mileage reimbursement policies, budgets, payroll and expense systems. As the AMAP increase is backdated to 6 April 2026, consideration should be given to how to handle mileage claims already paid to employees this tax year.
Following a busy week, there is plenty more news below, including new advisory fuel rates for company cars, HMRC’s May 2026 Agent Update, and the latest on the deceased NS&I accounts tracing issue, including tax exemptions. We have also published three new guides for subscribers, too – do check them out.
Online PRACTICAL tax resources for accountants and tax advisers BY accountants and tax advisers.
Quick News
Increase to mileage rates marks first change in 15 years
The Approved Mileage Allowance Payment (AMAP) rate has increased for the first time in 15 years. The rate applied to the first 10,000 business miles travelled by employees per year will increase from 45p to 55p and will be backdated to April 2026. The increased rate will also apply to the simplified expenses regime for the self-employed in 2026-27.
VAT temporarily reduced for children's meals, tickets and family attractions
The government is introducing a temporary reduced rate of VAT for children's meals in restaurants and family leisure activities over the summer. VAT will be reduced from 20% to 5% on qualifying activities in the latest government drive to ease pressure on household budgets.
Agent Update 143 May 2026
HMRC have published their Agent Update for May 2026. We have summarised the key content, including mandatory tax adviser registration, VAT return submission deadlines, claiming Personal Tax refunds, and support for taxpayers during the Iran crisis.
Deceased NS&I accounts tracing issue
In March 2026, Torsten Bell MP, the Minister for Pensions, informed the House of Commons that NS&I had identified an issue where the estates of deceased customers were not always repaid money from all of their accounts following a bereavement claim. NS&I have now published a 'delivery plan' setting out how this will be rectified, and the tax implications for estates.
Advisory fuel rates from 1 June 2026
HMRC have published new advisory fuel rates for company car drivers that apply from 1 June 2026.
Consultation on High Value Council Tax Surcharge
The government has launched a consultation to seek views on the design and delivery of the High Value Council Tax Surcharge (HVCTS), which is due to come into force from April 2028. Proposals reveal how HVCTS is likely to work in practice.
Tax Cases
Dip pots back on the menu
In Queenscourt Ltd v HMRC [2026] UKUT 00195, the Upper Tribunal (UT) found that dip pots provided as part of KFC meal deals were zero-rated as components of a multiple supply.
Editor's Choice
This week's Editor's Choice was selected by Andrew Symons. You can meet our team of editors and writers here: Meet the team.
Client communication: VAT reduction for children's meals, tickets and family attractions
To assist accountants in communicating the temporary reduction in the rate of VAT charged on children's meals in restaurants and family leisure activities over the summer, we are giving rossmartin.co.uk subscribers exclusive one-off access to 20:20 Innovation's client newsletters which cover the changes: Tax E-news and Business News.
Finance Acts 2026-27: tax update and Rolling Tax Planner
This rolling planner tracks the key tax announcements that impact the 2026-27 tax year and beyond. This planner is updated on an ongoing basis.
40% First Year Allowance (FYA)
As of 1 January 2026, a new 40% First Year Allowance (FYA) is available for main rate capital expenditure incurred by companies and unincorporated businesses. Unlike other FYAs, this allowance is available on assets used for leasing.
Guides & Updates
New This Week
Capital taxes round-up: 2026-27
NEW: A round-up of developments in capital taxes for individuals for 2026-27, including some topical Capital Gains Tax (CGT) and Inheritance Tax (IHT) cases.
Scottish Taxes: What's New 2026?
NEW: What’s new for Scottish taxes in 2025-26? What updates have occurred this year? What new changes will be implemented for 2026-27?
Statutory Payments: Employer's guide
NEW: What statutory payments are available to employees? When are they due, how should they be calculated, and how much can be recovered from HMRC?
Self-employed
Flat (fixed) rate expenses or actual cost toolkit
UPDATE: What types of expenses can I use fixed-rate expense deductions for? Which is better, fixed-rate deductions or actual cost?
Motor expenses (self-employed)
UPDATE: What expenses can you claim for motor and travel if you are self-employed? Why are there different versions of the rules? Which method is most beneficial for me?
Partnerships
Partnerships: What's new 2026-27?
What's new for partnerships in 2026-27?
Directors & Companies
Companies: Trading, non-trading and accounting periods
When is a company classed as trading, non-trading or dormant for Corporation Tax? What are the tax filing obligations in each case?
Companies: Permanent establishment & residence
UPDATE: From 1 January 2027 (or 1 September 2026 for companies in the oil and gas industry), it will become mandatory for profits and losses attributable to a foreign Permanent Establishment (PE) to be exempt from UK tax for UK-resident companies.
Employers
Travel (employer's guide)
UPDATE: How do employers apply the tax rules to travel costs? What is available for subsistence costs? What are the rules on home-to-work travel?
Authorised mileage rates (own vehicle)
UPDATE: How much can you claim for the costs of business travel? How much can be reimbursed by an employer towards the costs of qualifying business travel?
Private Client & Estate Planning
PRR: Private Residence Relief
What is Private Residence Relief (PRR)? What are the qualifying conditions? Can you claim relief on two homes? How do you claim PRR? Can you claim PRR if you develop your garden?
IHT: Residence Nil-Rate Band (RNRB)
What is the Residence Nil-Rate Band? When was it introduced? How does it work? Who can claim it?
Overseas & Residence
Transfer of Assets Abroad (ToAA)
What are the ToAA rules? When do they apply? How is the tax charge calculated? Is there any defence against the rules?
Penalties & Compliance
Failure to notify chargeability to tax
What is the failure to notify chargeability to tax? What happens if you fail to notify HMRC about your taxes? What penalties apply for failing to notify HMRC that you have a tax liability?
VAT
Partial exemption & input VAT
How do you calculate the amount of input tax you can recover under the VAT partial exemption rules? What are the de minimis rules?
Continuing Professional Development (CPD)
Recent and upcoming webinars include:
- Monthly Tax Update - June 2026
- Mandatory HMRC Agent Registration Part 2 – Where We Are Now
- Practice Insight - May 2026 (free)
- Monthly Tax Update - May 2026
- Practice Insight - April 2026 (free)
- Mandatory HMRC Agent Registration Part 1 – Getting Started Before May 2026
- Ethics and PCRT for Tax Advisors
Need Tax Support?
Virtual Tax Partner© Support
Have a tax query? Need a second option? Open a ticket and ask a question. A team of tax experts with a wide range of expertise: covering direct and indirect tax, as well as accounting, reorganisations and much more.
Missed the Last Tax Update?
Ross Martin Tax: SME Tax Update 21 May 2026
- HMRC's mandatory registration of tax advisers now live
- Targeted advance assurance service for R&D claims launched
- Tax fraud warning on Bills of Exchange
- Demolished house site was grounds and garden of remaining property
- Late payment of Class 2 NICs permitted
- Proof lacking as alcohol wholesaler loses R&D claim
- Trusts & Estates: What's New 2026/27 NEW
- Named tax avoidance schemes, promoters, enablers UPDATE
- Mandatory tax adviser registration with HMRC
- R&D: Advance Assurance
- P11D: Reporting benefits and expenses ...More
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