HMRC updates guidance for claiming new allowance
Qualifying expenditure on plant and machinery can qualify for a 40% first-year allowance from 1 January 2026. HMRC has now updated its guidance to help make claims. What do you need to do?
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HMRC clarifies treatment of averaging relief under MTD IT
HMRC has updated its guidance to explain how averaging relief claims will operate under Making Tax Digital for Income Tax (MTD IT). The clarification addresses concerns about how farmers and creators will claim relief once quarterly reporting becomes mandatory. What has changed?
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Double up on the employment allowance
You’re the sole shareholder of a limited company which employs several members of staff. You’re working on plans to start another business with an ex-colleague. Can both businesses benefit from the full employment allowance (EA)?
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VAT cut for children's holiday activities over summer
The government has announced a temporary reduction in the rate of VAT applying to certain children's holiday activity programmes during the summer holidays. The measure is intended to help families with childcare costs during the school break. What has changed?
The new 40% first-year allowance (FYA) is available to companies as well as unincorporated businesses. Perhaps the biggest winners will be companies that purchase assets and lease them out, as these assets are excluded from full expensing, and so 100% relief is limited to the £1 million annual investment allowance. Until this year, the only option for relieving any excess was through writing down allowances on a reducing balance basis. A claim needs to be made on the corporation tax return, but HMRC’s corporation tax online service will not be updated for the new allowance until 2027. A company that wants to make a claim in the meantime, e.g. one with a year end of 31 March 2026 filing this year, will need to use a workaround. HMRC has now updated its guidance, saying that claimants should use:
- boxes 725 or 750 for claim amounts
- box 760 for qualifying expenditure
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