Ensure compliance with HMRC rules when providing company cars. From P46(Car) submissions to benefit reporting, learn what steps to take for private use and specific exemptions.

Here are the steps you need to follow to inform HMRC if you make any cars available for private use by company directors or employees. Private use of a car includes employees’ journeys between home and work, unless they are traveling to a temporary work location.

You must submit a P46 (Car) form to HMRC if you:

• Provide company cars to employees
• Stop providing a company car
• Provide an additional car to someone

You can submit the form in the following ways:

• Complete it online and send a printed copy to the address listed on the form.
• Use HMRC’s PAYE Online service for employers.
• Use your payroll software.

Additionally, you must report the car benefit on your end-of-year forms and pay Class 1A National Insurance on its value. You must also notify HMRC if a company car is replaced.

You do not need to notify HMRC if you provide:

• 'Pool' cars, which are used by multiple employees for business purposes and usually kept on your premises.
• Cars adapted for employees with disabilities, if the only private use is for commuting.
• Emergency vehicles used exclusively by on-call employees in police, fire and rescue, ambulance, or paramedic services.

Advisory fuel rates for company cars help employers and employees manage fuel costs without triggering tax liabilities. Learn how to use these rates to avoid tax, especially car fuel benefit charges.

HMRC's fuel rates also known as advisory fuel rates are intended to reflect average fuel costs and are updated quarterly. These rates only apply to employees using a company car.

The rates can be used either by employers who reimburse employees for business travel in their company cars or where employees are required to repay the cost of fuel used for private travel.

HMRC will accept that there is no taxable profit and no Class 1A National Insurance on reimbursed travel expenses where employers pay a rate per mile for business travel no higher than the published advisory fuel rates.

Employees can also use the advisory fuel rates to repay the cost of fuel used for private travel. This is the easiest way to ensure that no fuel benefit charge (for private journeys in a company car) is payable. However, the fuel benefit charge will still be payable if it cannot be demonstrated to HMRC that the driver of the car has paid for all fuel used for private journeys, this includes commuting to and from work. To ensure that this does not occur employees will need to keep a log of private mileage.

Inheritance Tax nil-rate bands remain frozen until April 2030. Learn how this affects estates, the residence nil-rate band, and planning opportunities to maximise tax-free inheritance for loved ones.

The Inheritance Tax (IHT) nil-rate bands have been frozen for a number of years and had been set to remain at current levels until 5 April 2028. As part of the Budget measures, it was confirmed that the rates will remain at the same level for a further 2 years until 5 April 2030.

This means that:

• the nil-rate band will continue at £325,000;
• residence nil-rate band will continue at £175,000; and
• residence nil-rate band taper will continue to start at £2 million.

The residence nil rate band (RNRB) is a transferable allowance for married couples and civil partners (per person) when their main residence is passed down to a direct descendent such as children or grandchildren after their death. The allowance is available to the deceased person’s children or grandchildren.

Any unused portion of the RNRB can be transferred to a surviving spouse or partner. The RNRB is on top of the £325,000 nil-rate band. The allowance is available to the deceased person's children or grandchildren. Taken together with the current IHT limit of £325,000 this means that married couples and civil partners can pass on property worth up to £1 million (£325,000 x 2 plus £175,000 x 2) free of IHT to their direct descendants.

The transfer does not happen automatically and must be claimed from HMRC when the second spouse or civil partner dies. This is usually done by the executor making a claim to transfer the unused RNRB from the estate of the spouse or civil partner that died first.

There is a tapering of the RNRB for estates worth more than £2 million even where the family home is left to direct descendants. The additional threshold will be reduced by £1 for every £2 that the estate is worth more than the £2 million taper threshold. This can result in the full amount of the RNRB being tapered away.

From April 2026, Making Tax Digital for Income Tax (MTD for ITSA) will transform tax compliance for businesses, self-employed individuals, and landlords, mandating digital record-keeping and online submissions. Get prepared!

The mandatory signup for Making Tax Digital (MTD) for Income Tax is set to commence from April 2026. MTD for ITSA will fundamentally change the way relevant businesses, the self-employed and landlords interact with HMRC. The regime will require businesses and individuals to register, file, pay and update their information using an online tax account.

The rules will initially apply to businesses, self-employed individuals and landlords with an income of over £50,000 annually. MTD for Income Tax will then be extended to those with an income between £30,000 and £50,000 from 6 April 2027. A new system of penalties for the late filing and late payment of tax for ITSA will also apply.

It was announced as part of the recent Autumn Budget measures that MTD for Income Tax will be extended to sole traders and landlords with income over £20,000 by the end of the current Parliament. The precise timing of this change has yet to be confirmed.

HMRC states that, MTD for Income Tax is a new way of reporting income and expenses if you’re a sole trader or landlord. You’ll need to:

• use software that works with Making Tax Digital for Income Tax;
• keep digital records of your business income and expenses;
• send us quarterly updates; and
• submit a tax return and pay tax due by 31 January the following year.

If you have volunteered to test the MTD for Income Tax service then the new late submission penalties and late payment penalties will apply. If you are looking to volunteer now then you will be required to confirm that you agree that the new penalties will apply to you as part of the sign-up process.

The new penalties apply as following during the testing phase.

The UK government has recently addressed the Parliamentary and Health Service Ombudsman's (PHSO) report concerning the communication of changes to women's State Pension age. The PHSO identified maladministration by the Department for Work and Pensions (DWP) due to a 28-month delay in informing women born in the 1950s about these changes. In response, the government has acknowledged this finding and issued an apology.

PHSO Investigation Findings

The PHSO's investigation focused on how the DWP communicated these changes, not the policy decisions themselves. The findings were:

• 1995 to 2004: The DWP provided adequate and accurate information through various channels, including leaflets, campaigns, and its website.
• 2005 to 2007: Decision-making during this period led to a 28-month delay in sending personalized letters to affected women, which the PHSO deemed maladministration.
• Impact: While the delay constituted maladministration, the PHSO concluded it did not cause direct financial loss. However, it acknowledged that some women lost opportunities to make informed financial decisions, diminishing their sense of autonomy and control.

Government's Response

Work and Pensions Secretary Liz Kendall accepted the finding of maladministration and issued an apology for the delay in communication. She emphasized the government's commitment to learning from this case to prevent similar issues in the future.

Despite acknowledging the communication failures, the government has decided against providing financial compensation. This decision is based on evidence suggesting that unsolicited letters are often ineffective; research indicates that only one in four people recall receiving unexpected letters. Additionally, the government argues that the majority of 1950s-born women were aware of the impending changes, and earlier communication would not have significantly altered this awareness.

The government also considered the financial implications of compensation. Proposals for a flat-rate compensation scheme, with payments ranging from £1,000 to £2,950 per individual, were estimated to cost between £3.5 billion and £10.5 billion. Given the belief that most women were already aware of the changes, the government deemed such expenditure an unjustifiable use of taxpayer funds.

Reactions and Implications

The decision not to offer compensation has been met with criticism from advocacy groups, particularly the Women Against State Pension Inequality (WASPI) campaign. They argue that inadequate communication left many women unprepared for the changes, leading to financial hardship. The government's stance has also sparked debate among policymakers and the public about the adequacy of communication strategies and the responsibility of the state in ensuring citizens are well-informed about significant policy changes.

Conclusion

While the government has acknowledged and apologized for the delays in communicating changes to the State Pension age for women born in the 1950s, it has decided against offering financial compensation. This decision is based on evidence suggesting that earlier communication may not have significantly increased awareness and concerns about the proportionality of compensation costs. The situation underscores the importance of effective communication in policy implementation and has prompted discussions about how to better inform the public about significant changes that impact their financial planning and well-being.