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June: Key Finance News
From temporary VAT cuts and higher mileage allowances to tighter R&D scrutiny and new late payment protections, there’s plenty for you to digest this month.
Summertime savings: key measures for SMEs
The Chancellor announced various summer support measures aimed at easing household costs, but there are also some useful implications for businesses:
1. Tax-free mileage rates increased
HMRC has increased the approved mileage rate from 45p to 55p per mile for the first 10,000 business miles each tax year.
This change is backdated to the 6th of April 2026, meaning it applies from the start of the current tax year.
Why it matters:
- Businesses can reimburse staff more tax-efficiently
- Sole traders can claim a larger deduction for business travel
- This could help offset rising fuel and travel costs
If you or your team regularly travel for work, it may be worth reviewing your mileage claims process.
2. Temporary VAT reduction for family-focused businesses
Between 25th of June and 1st of September 2026, VAT drops from 20% to 5% on qualifying children’s meals and selected leisure activities.
This mainly affects:
- Restaurants and cafés with children’s menus
- Entertainment venues
- Family attractions like museums, zoos, and soft play centres
For businesses in hospitality and leisure, this could increase demand over the summer, but pricing systems and tills may need updating quickly.
New dividend reporting rules for company directors
If you’re a company director and pay yourself through dividends, there’s a new HMRC reporting requirement coming with the 2025/26 Self Assessment tax return.
HMRC will now want more detail about the companies you receive dividends from, including:
- The company name
- How much you took in dividends
- Your ownership share in the business
it’s more important than ever to keep clear records and make sure everything is properly documented.
Missing or incorrect information could lead to penalties, so it’s worth getting ahead of this now rather than scrambling at tax return time. If you’re unsure, or just want further support, click here to chat to us.
R&D tax claims: easier support, stricter checks
If your business is making a Research & Development (R&D) tax claim, HMRC has launched a new support service to help SMEs check if their claim is likely to qualify before submitting it.
This could be useful if you’re unsure about:
- Whether your work counts as R&D
- Costs linked to overseas work
- Outsourced project work
- Limits on how much relief you can claim
At the same time, HMRC is increasing its checks on R&D claims, and a recent tribunal case showed that weak or poorly evidenced claims are being challenged.
The key takeaway:
If you’re claiming R&D relief, make sure your records are clear, your work genuinely qualifies, and you have the right advice behind you.
New rules could help tackle late payments
Late payments continue to be one of the biggest cash flow challenges for small businesses, but new legislation is being proposed to help.
The government’s new Small Business Protections Bill includes plans to:
- Limit large businesses to 60-day payment terms when paying smaller suppliers
- Add automatic interest on overdue invoices
- Give the Small Business Commissioner more power to investigate and take action against persistent late payers
If these changes go ahead, it could offer better protection and improve payment times across the board.
It’s worth keeping an eye on this one, especially if late-paying customers are a regular issue for your business.
Changes to employee benefits reporting delayed
The shift away from P11Ds is still happening, but now in stages:
April 2027 – company cars, fuel, vans, and medical benefits
April 2028 – most other benefits
This gives employers more time to prepare, but payroll systems may still need reviewing well in advance.
More time before Companies House filing changes
Businesses have been given an extra year to prepare for upcoming Companies House filing changes, with the new rules now starting in April 2028 instead of 2027.
Some of the biggest changes will include:
- Filing accounts using software only (paper and web filing will end)
- Small companies needing to submit more financial detail
- Simpler account filing options being removed
This gives businesses more breathing space to get ready, but the move towards fully digital reporting is continuing. If you still rely on manual or paper-based processes, now is a good time to start planning ahead. We can help you with this, just click here.
AI in business: still plenty of room to grow
AI is everywhere right now, but most small businesses still aren’t using it consistently. A recent report found only 1 in 5 SMEs use AI regularly.
The biggest reasons holding businesses back were:
- Cost
- Not knowing where to start
- Concerns around privacy and data
- Lack of time
AI can be a huge time-saver, whether that’s admin, marketing, customer support or planning, but it works best when there’s a clear reason for using it.
Our message to you – Don’t feel pressure to ‘use AI’ just because everyone else is! Start with one area where it could save time or improve efficiency, test it, and build from there.
Cyber security update: passkeys are becoming the new standard
The National Cyber Security Centre (NCSC) is now recommending passkeys as a safer alternative to passwords and some types of two-step verification.
Passkeys use things like your fingerprint, face ID or device PIN instead of a password, making it much harder for hackers to gain access.
For business owners, this is a good reminder to review:
- How your team logs into systems
- Password habits and security policies
- Who has access to important business tools
Cyber attacks on small businesses are still rising, and simple security upgrades like passkeys can make a big difference. Small changes now can help prevent bigger problems later.
Compliance checks are increasing… and scams are too
HMRC has announced 30,000 extra business compliance checks over the next year, mainly targeting cash-based businesses and areas where tax evasion is more common.
At the same time, Companies House is warning business owners about fake payment requests and scam letters asking for unnecessary fees.
What to watch out for:
- Unexpected invoices for Companies House or trademark services
- Requests to “verify” or “activate” your business account
- Emails or letters asking for payments that don’t look right
Now is a good time to make sure your records are accurate, your bookkeeping is up to date, and your compliance processes are in order. It’s also worth double-checking any payment requests before acting on them.
If you have any concerns, lets chat.
The key theme this month is being proactive – whether that’s reviewing your finances, tightening your processes, or planning ahead for upcoming changes.
Getting ahead of these updates now can help put your business in a stronger position for the rest of the year.
If you’d like help with tax planning, payroll updates, cash flow, or making sense of any of these changes, please don’t hesitate to get in touch, we’re always happy to help!
MAIN TAX EVENTS HAPPENING IN JULY: GET AHEAD
DATE
WHAT’S DUE
1 July
Corporation Tax for year to 30/09/2025, unless quarterly instalments apply
5 July
Deadline to agree PAYE settlement agreements for 2025/26
6 July
P11D, P11D(b) and Employment Related Securities returns due for 2025/26
19 July
PAYE & NIC deductions, and CIS return and tax, for month to 05/07/2026 (due 22 July if you pay electronically)
31 July
Due date for the second self assessment payment on account for 2025/26 (if applicable)
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