HMRC have published their Agent Update for April 2026. We have summarised the key content, including a reminder of the new National Living Wage rates, updates to the Statutory Sick Pay rules and details on how to notify HMRC of the cessation of a trade or property business for Making Tax Digital (MTD) purposes.
New rates for the National Living Wage
From 1 April 2026:
- £12.71 for employees 21 and over.
- £10.85 for employees aged between 18 and 20.
- £8 for employees under the age of £18.
- £8 for apprentices.
Apprentices are entitled to the rate above if:
- They are under the age of 19.
- Aged 19 and over and in the first year of their apprenticeship.
Apprentices are entitled to the minimum wage for their age if both of the following apply:
- They are over 19 years of age.
- They have completed the first year of their apprenticeship.
See National Living Wage/Minimum Wage Rates
Small Employer's Relief compensation relief rate increase
From 6 April 2026:
- The employers' rate increased from 8.5% to 9%.
- Clients who qualify for the relief can reclaim 100% of all statutory payments except Statutory Sick Pay (SSP).
- This means small employers can reclaim 109% of the statutory payments they make from HMRC.
- All other employers can claim back 92%.
The compensation rate applies to
- Statutory Maternity Pay.
- Statutory Paternity Pay.
- Statutory Adoption pay.
- Statutory Paternal Bereavement Pay.
- Statutory Neonatal Care Pay.
- Shared Parental Pay.
Statutory Sick Pay Changes
From 6 April 2026:
- The lower earnings limit is removed.
- All employees are eligible for SSP regardless of income.
- SSP is paid at the lower of 80% of normal weekly earnings or the flat rate of £123.25.
- The waiting period for SSP will be removed.
- SSP is paid from day one instead of day four.
- HMRC advise that employers may see an increase in short-term absences, which agents should highlight to clients when discussing payroll planning and sickness policies.
HMRC recommend the following to prepare employers for change:
- Ensure that the client's payroll software has been updated to account for the changes and that transitional protections are applied correctly.
- Encourage clients to discuss the changes with their payroll provider.
See Consultation on strengthening Statutory Sick Pay
Student and postgraduate loans
From 6 April 2026, the rates and thresholds are:
- Plan 1: £26,990.
- Plan 2: £29,385.
- Plan 4: £33,795.
- Plan 5: £25,000.
- Postgraduate loan: £21,000.
The deduction rates are as follows:
- Plans 1, 2, 4 and 5 remain at 9% for any earnings above these plans' thresholds.
- Postgraduate loans remain at 6% for any earnings above the threshold.
If clients receive a student loan notice (SL1) or a postgraduate notice (PGL1) from HMRC, ensure the correct loan or plan type is detailed, as well as the correct start date. This ensures employees are not paying more or less than required.
If an employee's earnings are:
- Below the respective thresholds, the employee's payroll records should be updated to show that they have a student loan or postgraduate loan. The notice can be filed; there is no requirement to return this to HMRC.
- Above the respective thresholds and deductions have not been taken, HMRC will send a reminder. If deductions still do not start, HMRC may make direct contact with the agent or client.
- Any deductions should continue until HMRC advise otherwise.
HMRC advise that agents keep addresses and emails up-to-date for clients.
See Student loans
Removal of tax relief for non-reimbursed working from home expenses
From 6 April 2026:
- Employees are no longer able to claim an Income Taxdeduction for working from home expenses.
- The weekly amount that could previously be claimed could either be evidence-based on actual expenditure or fixed at £6 per week.
- Claims can still be made for the previous four years.
- Employees can obtain reimbursement of homeworking costs directly from their employer.
See Working from home (employees)
Reminder of important dates and processes for reporting Benefits In Kind (BIKs)
Employers should be aware:
- The payrolling service for BIKs is now closed for 2026-27 registration.
- No new registrations for 2026-27 can be accessed.
- Employers who did not register before 6 April 2026 are unable to payroll BIKs.
Those who did register can:
- View the benefits they payroll.
- View the employees' payroll benefits.
- Exclude employees from their payrolling.
If an employer is not registered, they must continue to report employee benefits using the appropriate P11D form.
Furnished Holiday Lets (FHLs)
HMRC are reminding agents that the FHL regime was abolished on 1 April 2025.
From 1 April 2025:
- FHLs are no longer treated separately for tax purposes.
- Instead, they are combined with a clients other UK and overseas property income.
- The first Self Assessment return to reflect these changes is 2025-26.
See Furnished Holiday Letting (FHL): Abolition of the regime briefing
Digital tax code changes trial
From 18 March 2026:
Clients with simple tax circumstances and who meet specific criteria may see a new digital tax coding notice when they log into their online account. HMRC are holding a three-month trial to evaluate simplified language for communicating tax code changes.
The criteria are:
- They must only have one live employment or occupational pension at the time of logging into the PAYE service.
- They must not have a special tax code such as BR, D0, or CD1 as either their current or previous tax code.
- They must have had at least one change to their tax code.
Additionally, other online improvements will include:
- Information on what makes up a person's tax code.
- An explanation for each coding notice item.
See What is the 2026-27 PAYE tax code?
Guideline for Compliance, Oil & gas sector, place of supply
HMRC have published new VAT guidelines to help determine the place of supply in the oil and gas sector (GfC18).
The guidelines are for VAT-registered businesses in the oil and gas sector, but may also be useful to businesses operating in wind, carbon capture and storage.
The guidelines explain the:
- Special place of supply rules most relevant to the sector.
- General place of supply rules.
- Fixed establishment rules.
- Other factors affecting VAT treatment.
Changes to the claims process for creative industries tax reliefs and expenditure credit
From 6 April 2026:
- All claims must now include CT600P, a supplementary page to the CT600 Company Tax return.
- Both must be completed and submitted at the same time.
- HMRC have become aware of a small validation error but has stated it will not affect the validity of the claim.
- Companies making a claim must also complete an additional form to support the claim before or on the same day as submitting their return.
- A new version of the additional information form has been released to coincide with the introduction of CT600P. The new version removes the section on expenditure credit redemption, as this is now covered in CT600P.
- The new version of the form also updates the process for companies that are claiming Theatre Tax Relief, Orchestra Tax Relief, or Museums and Galleries Exhibition Tax Relief.
- These companies are now only required to provide full details for up to 10 productions.
See Creative Industries Additional Information Form (AIF)
Making Tax Digital (MTD)
HMRC are encouraging those who have not yet signed up to MTD and earn above the £50,000 threshold to do so now.
- Clients can be signed up here; agents will need an Agent Services Account (ASA) to sign up clients.
- Guidance on how to set up an ASA can be found here.
- If sign-up fails, contact the agent's dedicated line to request a client record check.
When registering a client, all sources of income must be included:
Sources of self-employment will be prepopulated based on the last known Self Assessment return.
- Check to certify that the trades are relevant and no entries are missing.
- Property sources will need to be added.
- Consider giving all trades a relevant name to make it easier to identify for quarterly reporting.
Agents should check that their software is MTD-compatible for sending quarterly updates. One product or multiple products can be used, but they must work together to meet all MTD requirements.
If a client is no longer required to report for MTD due to relevant income sources ceasing, the action they must take will depend on whether they have ceased all of their self-employment or property sources or just one of those sources.
If all relevant sources have ceased in 2025-26:
- The agent or the client will need to contact HMRC to inform them.
- An HMRC adviser will then update the client's obligations and confirm that the client is no longer required to use MTD for Income Tax.
- A confirmation letter will then be sent out.
If only one source has ceased:
- The client will need to continue to report using MTD for 2026-27.
- Clients or agents can record cessation using HMRC online services.
In both situations, MTD is still required for 2025-26.
See Making Tax Digital Survival guide (for self-employed and landlords)
Self Assessment Individual and Partnership specials and exclusions
The Self Assessment Special Document for Individuals, Partnerships and Trusts has been updated. The document sets out whether clients should file a paper return as opposed to an online return.
- The document is produced for software developers who work with Self Assessment online services but can also be useful for tax agents.
See Online filing exclusions for 2025-26 tax returns
Guidance on HMRC's enhanced powers to tackle tax adviser facilitated non-compliance
From 1 April 2026:
HMRC has stronger powers to tackle tax advisers who intentionally assist clients to pay less tax. HMRC have introduced the following guidance:
- How HMRC investigate and deal with tax advisers suspected of 'sanctionable conduct'.
- How HMRC may publish certain information relating to misconduct.
- First tranche of technical guidance.
See Penalties: Tax advisers (sanctionable/dishonest conduct)
Agent Services to help with unresolved queries
HMRC have two dedicated services that help tax agents resolve queries that have not been resolved through their other channels. These services are aimed at navigating delays or complex issues to ensure formal complaints are only necessary when needed. Agents are encouraged to use these services before submitting a complaint.
Agent account managers' service:
- Can assist agents in resolving ongoing queries across all taxes.
- Includes repayment chasing but cannot provide technical advice.
Before using the agent account managers' service:
- Ensure there is a 64-8 in place.
- Attempt to resolve the query at least twice through the normal channels.
- Check when a reply is expected from HMRC and allow that timescale to pass.
- Confirm that no formal complaint has been submitted.
- Queries can be raised using an online form.
Personal Tax query resolution service for agents:
- Should only be used for PAYE and Self Assessment queries.
Before using the Personal Tax query resolution services:
- Check when a reply is expected from HMRC and allow that timescale to pass.
- Attempt to resolve the query at least twice through the normal channels.
- Confirm that no formal complaint has been submitted.
Non-domiciled individuals
From 6 April 2025:
- Domicile status was removed and replaced by a system based on tax residence.
- HMRC will contact people by email or letter to help them better understand what this means for their tax affairs.
The communication will provide information on the following:
- The new Foreign Income and Gains Regime (FIG).
- The arising basis.
- Temporary Repatriation Facility (TRF).
- Capital Gains Tax (CGT) rebasing.
- Removal of trust protections
- Overseas Workday Relief (OWR).
See Non-Domicile: Rules from 5 April 2025
Corporation Tax late filing penalties delay
From 1 April 2026:
- Penalties for late filing of Corporation Tax (CT) returns will increase.
- HMRC are currently updating their system to show the correct penalty amounts on notices.
- The updates will be completed by 30 June 2026.
- Until then, HMRC have paused issuing late penalty notices to ensure no incorrect amounts are shown on the notice.
- CT returns should still be returned on time to avoid increased penalties.
- If a return is late, a penalty notice will be issued, but this will be delayed until the update has been completed on 30 June 2026.
- There is no requirement to contact HMRC if a penalty is due, but no notice has arrived; these will be issued in July 2026.
See Penalties: Corporation Tax
Employment-Related Securities (ERS) reporting
HMRC no longer require companies to submit an ERS end-of-year return for non-tax advantaged schemes and awards where the employee is a short-term business visitor (STBV) covered by an EP Appendix 4 arrangement.
- No UK Income Tax or National Insurance contributions would be due in this instance.
- ERS reportable events, covered by the EP Appendix 8 arrangement, must still be reported.
See Employment-Related Securities Bulletin 64: February 2026
Changes to overlap relief
From 1 June 2026:
- The online service used to help clients check their overlap relief figure for 2023-24 will close.
- If a client needs their overlap relief figure after this date, they should check their own records first or use the HMRC calculator to work it out.
New Dedicated Trusts helpline number
From 9 April 2026:
- HMRC have introduced a new dedicated number for trusts.
- Agents should now call 0300 322 9640 when needing to discuss matters.
- The normal Inheritance Tax (IHT) helpline should still be used for IHT queries.
Multi-factor authentication for agent accounts
This will be introduced to provide a layer of security to protect both agents and clients' information.
More information on how to prepare be found here.
Administrative Burdens Advisory Board (ABAB) Survey
The ABAB Survey is commissioned by an independent body and provides insight into big issues faced by small businesses, including those who identify as tax agents.
- ABAB has a board that comes from a range of businesses and professions.
- Their goal is to support HMRC to make the tax system quicker and simpler.
- ABAB challenge HMRC on the performance and provide scrutiny against important initiatives, including MTD.
- The survey is an opportunity for tax advisers to provide insight.
Providing feedback on HMRC manuals
HMRC have asked agents to suggest or report issues they spot with HMRC manuals. The primary purpose of the manuals is to explain HMRC's interpretation of the relevant legislation; however, feedback from agents is essential.
- Feedback routes are on all pages on Gov.uk.
- Or use the contact Gov.uk form.
The HMRC Manuals team review all feedback given on the manuals from both internal and external users.
External link