Tax Update October 2026

With the Autumn Budget scheduled for 28 October, businesses and individuals are watching closely for announcements that could affect tax planning in 2027 and beyond.

While the Chancellor has not confirmed specific measures, attention is expected to focus on business investment, public finances, digital tax administration and potential changes to tax reliefs. Business owners may wish to review their current tax position ahead of any announcements to ensure they are prepared for future changes.

Periods of tax uncertainty often present valuable planning opportunities, particularly for owner-managed businesses considering investments, pension contributions or profit extraction strategies.

Our recommendation:

• Review your current tax planning arrangements.
• Consider whether planned investments should be accelerated.
• Monitor Budget announcements carefully.
• Seek professional advice before making major financial decisions.

HMRC continues to expand its use of digital data and advanced analytics to identify inaccuracies in tax returns and compliance records.

Information received from banks, employers, online marketplaces, pension providers and other third parties enables HMRC to compare reported income against external sources. Where discrepancies arise, taxpayers may receive compliance checks or requests for further information.

As HMRC’s technology becomes more sophisticated, maintaining accurate records is becoming increasingly important for both businesses and individuals.

Key actions to consider:

• Ensure bookkeeping records are complete and up to date.
• Reconcile income figures regularly.
• Retain supporting evidence for expenses and claims.
• Address any historic inaccuracies as soon as possible.

Early correction of errors can often reduce potential penalties and compliance concerns.

Many self-employed individuals and landlords now operating under Making Tax Digital (MTD) for Income Tax will shortly be preparing their next quarterly submission.

HMRC has emphasised the importance of maintaining digital records throughout the year rather than attempting to update information close to filing deadlines. Businesses that adopt regular bookkeeping processes are generally finding compliance considerably easier and more accurate.

As further phases of MTD continue to develop, digital record keeping is becoming a central part of tax compliance for UK businesses.

To stay compliant:

• Keep records updated throughout the quarter.
• Review transactions regularly.
• Ensure software remains MTD-compatible.
• Allow sufficient time before submission deadlines.

Businesses that establish good digital processes now are likely to be better prepared for future reporting requirements.

More information about our MTD services can be found by CLICKING HERE

HMRC has continued its focus on National Minimum Wage (NMW) compliance, particularly within sectors that rely heavily on variable hours, deductions and salary sacrifice arrangements.

Employers can unintentionally breach NMW rules through uniform deductions, accommodation calculations, unpaid working time or incorrect payroll processing.

Even minor errors affecting multiple employees can result in significant liabilities and reputational damage.

Employers should review:

• Salary sacrifice arrangements.
• Employee deductions.
• Working time calculations.
• Payroll processes and controls.

Regular reviews can help identify issues before they become costly problems.

Cybercrime continues to represent a significant risk to businesses of all sizes. HMRC has reported ongoing phishing campaigns that attempt to obtain taxpayer information, banking details and login credentials through fraudulent emails, text messages and websites.

Businesses should ensure that staff understand how to identify suspicious communications and verify requests before sharing sensitive information.

Good practice includes:

• Using multi-factor authentication wherever possible.
• Regularly updating passwords and software.
• Providing staff awareness training.
• Reporting suspicious HMRC communications promptly.

Strong cyber security controls help protect both business operations and sensitive financial data.

• Monday 5^th October – Deadline for informing HMRC if you need to complete a Self-Assessment tax return – CLICK HERE to find out more.
• Wednesday 21^tst October – Deadline for sending 2025-26 tax return by post
• Wednesday 28^th October – AUTUMN BUDGET
• Thursday 5^th November – Next Bank of England meeting.
• Saturday 7^th November – Deadline for the 2026/27 first Quarterly Update, required for those already mandated into MTD for Income Tax – for more information on how Folkes Worton can assist you with the new MTD for Income Tax requirements – CLICK HERE

Folkes Worton LLP Chartered Accountants
Accounting for the Future