Summer 2026 tax changes: VAT cuts, mileage rates, R&D, crypto and HMRC reporting
Summer 2026 brings a mixture of useful tax breaks and extra reporting obligations for UK businesses, company directors, landlords, sole traders and individuals with cryptoassets.
Some changes may reduce costs, such as the temporary VAT cut for family attractions and children’s meals, and the increase in tax-free mileage reimbursements. Others show HMRC’s continued move towards more detailed reporting, better records and greater transparency.
Below is a summary of the key updates, with links to our detailed guides.
1. Temporary VAT cut for family attractions and children’s meals
The Great British Summer Savings scheme temporarily reduces VAT from 20% to 5% on certain children’s meals, children’s admission tickets and qualifying family attractions between 25 June 2026 and 1 September 2026.
This could help families reduce the cost of summer days out, but businesses need to be careful. The reduced rate does not apply to every family-related sale. The rules depend on what is being sold, how it is marketed, and when the admission or supply takes place.
Restaurants, cafés, soft play centres, cinemas, theatres, zoos, museums, theme parks and similar attractions should review their VAT treatment before applying the reduced rate.
Read our full guide:
[Great British Summer Savings: what the temporary VAT cut means for family attractions and children’s meals]
2. Tax-free mileage reimbursements rise to 55p per mile
From 6 April 2026, the main approved mileage allowance payment rate for cars and vans increased from 45p to 55p per business mile for the first 10,000 business miles in the tax year.
This is a welcome change for employees, directors and sole traders using their own vehicles for business journeys. However, the journey must still qualify as business travel. Ordinary commuting does not qualify.
Employers should update mileage policies, payroll processes and expense systems. Employees and directors should keep accurate mileage records showing the date, destination, purpose and number of business miles.
Read our full guide:
[Tax-free mileage reimbursements rise to 55p per mile: what employers, directors and sole traders need to know]
3. R&D advance assurance: more certainty before making claims
R&D tax relief remains valuable, but HMRC scrutiny has increased. Companies now need stronger evidence, clearer project descriptions and better cost analysis.
HMRC’s advance assurance services can help eligible SMEs obtain more certainty before submitting a claim. Targeted advance assurance may be useful where a company wants HMRC’s view on a specific complex or higher-risk area, such as whether a project meets the R&D definition or whether particular costs qualify.
Weak or unsupported R&D claims can lead to HMRC enquiries, delays, penalties and repayment demands, so businesses should review claims carefully before submission.
Read our full guide:
[R&D advance assurance: how SMEs can reduce the risk of HMRC challenge]
4. More HMRC reporting for directors, traders and cryptoasset investors
From the 2025/26 Self Assessment tax return, some information that was previously optional becomes mandatory.
Self-employed traders will need to provide commencement or cessation dates where they start or stop trading during the year.
Close company directors will need to provide more information, including the company name, company registration number, dividends received from the company and their percentage shareholding.
Cryptoasset reporting is also increasing. The Cryptoasset Reporting Framework means HMRC is expected to receive more information about cryptoasset users and transactions. Anyone buying, selling, swapping or otherwise dealing in cryptoassets should make sure they have complete records.
Read our full guide:
[More HMRC reporting from 2025/26: directors, cryptoassets and capital allowance claims]
5. Capital allowances and pre-development costs: check before assuming relief
Businesses planning major projects should be careful before assuming that all pre-development costs qualify for capital allowances.
Recent case law has shown that some survey and study costs incurred before installing plant and machinery may not qualify as expenditure on the provision of plant.
This is particularly relevant for businesses involved in construction, renewable energy, infrastructure, property development and other projects where significant feasibility, environmental or technical studies are needed before work begins.
The practical point is simple: not every cost connected with a project will qualify for plant and machinery allowances. The tax treatment should be checked before major spending decisions are made.
Read our full guide:
[Capital allowances and pre-development costs: what businesses need to know]
What should businesses do now?
The direction of travel is clear. HMRC wants more accurate reporting, better records and stronger evidence behind tax claims.
Businesses should now:
- check whether they qualify for the temporary 5% VAT rate;
- update mileage reimbursement policies from 6 April 2026;
- review R&D claims before submission;
- make sure dividend and shareholding records are accurate;
- gather full cryptoasset transaction records;
- check capital allowance treatment before committing to major project costs.
Final thought
The summer 2026 tax changes include some helpful reliefs, but they also bring extra compliance risks.
The VAT cut and higher mileage rates may reduce costs, but only where the rules are applied correctly. At the same time, HMRC’s focus on director reporting, cryptoassets, R&D claims and capital allowances means businesses need to keep better records than ever.
If any of these changes affect you or your business, Merranti Accounting can help you understand the rules, prepare the right records and avoid costly mistakes.
FAQs
What are the main summer 2026 tax changes?
The main updates include a temporary VAT cut for certain family-focused supplies, an increase in the approved mileage rate for cars and vans, more HMRC reporting for directors and traders, increased cryptoasset reporting, R&D advance assurance developments and capital allowance issues for pre-development costs.
What is the temporary VAT cut for family days out?
The Great British Summer Savings scheme temporarily reduces VAT to 5% for certain children’s meals, children’s tickets and qualifying family attractions between 25 June 2026 and 1 September 2026.
What is the mileage allowance from April 2026?
For cars and vans, the approved mileage rate is 55p per mile for the first 10,000 qualifying business miles and 25p per mile after that.
Are company directors facing more HMRC reporting?
Yes. Close company directors are expected to provide more information on Self Assessment returns, including company details, dividends received and shareholding percentage.
Are cryptoassets taxable in the UK?
Cryptoasset gains and income can already be taxable, depending on the facts. Increased reporting means HMRC is likely to receive more information about cryptoasset activity.
Do pre-development costs qualify for capital allowances?
Not always. Some survey, study or feasibility costs may not qualify for plant and machinery allowances, even where they are commercially necessary for a project.
