Proposed Key Tax Changes

The government has unveiled a package of proposed tax and customs reforms designed to reduce administrative burdens, improve fairness and certainty, and modernise HMRC’s systems. Whilst many of the measures are currently open to consultation, they provide a clear indication of the government’s direction and are worth keeping on the radar.

What are the Proposed Key Tax Changes?

Income Tax Self-Assessment Payments

One of the most significant proposals is the introduction of more timely Income Tax Self-Assessment payments. From April 2029, taxpayers with PAYE income may be required to pay more of their estimated Self-Assessment liability during the tax year through PAYE. The government is also consulting on wider reforms to Payments on Account. The aim is to spread tax payments into smaller, more manageable instalments and to reduce unexpected tax bills.

VAT and the ‘Option To Tax Process’

For VAT, HMRC plans to digitise the ‘Option to Tax’ process. This will include replacing paper forms with new digital services by the end of 2026.

The proposed changes are to support:

• online submissions,
• bulk uploads,
• revocations
• VAT registration cancellations

The aim is to make the process quicker, more accurate and easier for businesses and advisers to navigate.

HMRC is also exploring how supplementary VAT return data already held within businesses’ digital accounting systems could be used to improve compliance while reducing administrative effort.

Cash ISAs

The government has confirmed ISA anti-circumvention rules following Budget 2025. These measures are intended to support wider ISA reforms by preventing workarounds to proposed Cash ISA limits. This includes restrictions on transfers and holdings within non-Cash ISAs.

Inheritance Tax

Further simplifications are proposed for Inheritance Tax reporting. Removing the need for certain non-taxpaying trusts to submit Inheritance Tax accounts where no tax is due.

These changes are expected to take effect from 6 April 2027.

Capital Gains Tax

Draft legislation has been published to modernise Capital Gains Tax gift ‘holdover relief’ claims relating to business assets, restoring the intended operation of the relief and removing distortions that have developed over time.

What Do I Need To Do?

These measures remain subject to consultation. They do, however, signal a continued focus on digitalisation, simplification and earlier tax compliance. Businesses and individuals should monitor developments closely and consider how the proposed changes may affect their future tax planning and reporting obligations.

Why Contact Whitings LLP?

In addition to providing compliance services, we also pride ourselves in offering quality, proactive, and timely tax advice and planning services tailored to your needs. Contact your local Whitings LLP office/your usual contact for more information and to discover how we may able to add value to your affairs.