Budget 2026: Administration update
The Autumn Budget, delivered by the Chancellor on 28 October 2026, contained several measures relating to tax administration, particularly in terms of collection of taxes.
30 Oct 2026
The Autumn Budget, delivered by the Chancellor on 28 October 2026, contained several measures relating to tax administration, particularly in terms of collection of taxes.
In welcome news, the government has confirmed that taxpayers required to join Making Tax Digital for Income Tax from April 2027 (when the threshold reduces to £30,000), will not receive penalty points for late submission of their first four quarterly updates for the 2027/28 tax year. Any taxpayers mandated from 2026/27 will start to receive penalty points for late submissions for 2027/28.
Reducing the Tax Gap has been a stated priority for the Labour government and the Budget confirmed three measures for reducing tax debt:
- Income Tax Self Assessment taxpayers will be required to make more frequent in-year payments from April 2029.
- VAT and PAYE liabilities must be paid by Direct Debit from April 2029 subject to certain defined exceptions. Businesses will still be able to pay using another method up to a cut-off date with Direct Debit used to collect any remainder.
- Powers will be granted to secure the direct recovery of lower value tax debts from 2029/30.
Ellen Milner, Director of Public Policy at CIOT said:
'Direct debit can be convenient, and there is a good case for encouraging greater take-up. But we remain unconvinced that businesses need to be compelled to set one up, particularly where they already have a good record of paying their tax on time.
'Automation can make tax administration easier, but it needs to work for taxpayers as well as HMRC.'
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