HMRC has revealed that it had £42.8 billion in outstanding tax debt at the end of March 2025, equivalent to 5% of total tax receipts. The figures appear in its corporate report, The HMRC tax debt strategy – update.

The report also highlighted progress in recovering unpaid tax, with HMRC resolving £48.7 billion of tax debt in the first two quarters of 2025-26, compared with £21.8 billion during the same period in 2019-20. HMRC said the outstanding debt balance had fallen as a proportion of tax receipts, despite growth in the tax base.

HMRC’s Tax Debt Strategy, published in October 2023, set out 4 strategic pillars to guide their approach to manage and resolve tax debt. The strategy is focused on preventing tax debt, tailoring interventions to taxpayers’ circumstances, improving debt recovery and being adaptable. Measures include payment reminders, improved and expanded digital services, more use of private sector debt collection agencies and additional debt management staff.

HMRC is also increasing its focus on older debts. The report states that debt more than a year old and not covered by a managed payment arrangement rose from £5.3 billion in 2020 to £18.8 billion in 2025. 

HMRC is also working to provide tailored support to taxpayers experiencing financial hardship or who have personal difficulties. Support can range from an extended time to pay arrangement to receiving one-to-one dedicated extra support.
 

Mayors and local leaders in England are to be given powers to introduce an overnight visitor levy, creating a new charge for people staying in short-term visitor accommodation.

The government announced the plans on 10 September 2026 following a consultation which closed on 18 February 2026. The levy will be optional, with mayors and leaders of Foundation Strategic Authorities able to decide whether to introduce it and how the money raised should be spent.

The charge will be based on a percentage of the accommodation cost rather than a fixed amount. The government says this approach is intended to avoid placing a disproportionate burden on people taking cheaper holidays. Local leaders will also have flexibility to provide exemptions, and temporary accommodation and shelters or refuges will not be subject to the levy.

Hotels and other accommodation providers will be responsible for paying the levy to the relevant strategic authority or mayor. The government says it will work with providers to make the system as straightforward as possible to administer.

Revenue could be used to support local priorities such as public transport, high streets, cultural attractions, public spaces and tourism infrastructure. However, the precise rate, exemptions and spending priorities will be determined locally in consultation with local businesses and residents.

Legislation will be introduced to establish the levy, with the government expecting mayors and Foundation Strategic Authorities to set out spending plans by early 2028. The levy represents an additional cost for visitors, but the amount and whether it applies will depend on where they stay.

Visitor levies are already being introduced elsewhere in the UK. A visitor levy in Edinburgh came into effect on 24 July 2026 and Cardiff Council is expected to introduce a visitor levy from 1 April 2027.

HMRC is reviewing proposals to introduce new powers for recovering lower-value, persistent tax debts from individuals and businesses that repeatedly fail to engage with collection efforts. The proposals, set out in a public consultation earlier this year, would allow HMRC to recover debts through affordable monthly instalments taken directly from a taxpayer's UK bank or building society account. The measure is intended to address debts that are difficult and costly to recover using existing enforcement methods. HMRC estimates that more than 750,000 lower-value debts, worth over £2 billion in total, remain unresolved each year after standard collection attempts have failed. Under the proposed framework, the automated direct deductions would be capped at £5,000 for individuals and £10,000 for businesses. 

The proposed process would only apply after HMRC's standard collection procedures have been completely exhausted. Taxpayers would first receive a formal Pre-Deduction Notice (PDN), giving them a final opportunity to pay the debt, contact HMRC, arrange a Time to Pay agreement, or raise a formal objection. A 14-day notice period is currently proposed by the government, though several professional stakeholders are calling for an extended notice window of at least 30 days.

HMRC has also proposed safeguarding measures for individuals requiring extra support or experiencing genuine financial hardship, including mandatory affordability checks and manual case reviews where appropriate.

The technical consultation closed on 28 August 2026, and the government is expected to publish a formal summary of responses later this year.

Missing a tax deadline can result in penalties from HMRC, but a taxpayer may be able to appeal if they have a genuine reasonable excuse. Whether an excuse is accepted depends on the individual facts and whether the taxpayer took action to put things right without unnecessary delay.

HMRC does not provide a complete list of acceptable excuses, as each case is considered on its own facts. However, examples that may qualify include serious illness, bereavement, unexpected events outside the taxpayer’s control, or problems with HMRC’s systems that prevented a return or payment being made on time.

Other situations may also be accepted where the taxpayer can demonstrate that circumstances prevented them from meeting the deadline and that they took action to put matters right without unreasonable delay once those circumstances ended. For example, a taxpayer may have experienced an unexpected failure of computer equipment or lost essential records due to circumstances beyond their control.

A reasonable excuse will generally not include situations such as forgetting a deadline, relying on another person who failed to complete the task, or not having enough money to pay a tax bill unless the financial difficulty was caused by an exceptional circumstance.

If HMRC accepts that there was a reasonable excuse, the penalty may be cancelled. Taxpayers should appeal promptly, normally within 30 days of the date on the penalty notice, and explain what happened, when it occurred and why it prevented them from meeting their obligation.

Keeping good records and contacting HMRC as soon as a problem arises can help demonstrate that reasonable steps were taken to meet tax responsibilities.

The new Chancellor of the Exchequer, John Healey has confirmed, in a video message, that the next UK Budget will take place on Wednesday, 28 October 2026. Details of all the Budget announcements will be made on a special section of the GOV.UK website which will be updated following completion of the Chancellor’s first Budget speech in October.

HM Treasury is inviting written representations for the Autumn Budget 2025 from individuals, interest groups, MPs and organisations. Submissions should propose evidence-based policy ideas or comment on existing policies, with clear rationale, costs, benefits and deliverability. The deadline for submissions is 23:59 on Wednesday, 9 September 2026.

The Budget will be published alongside the latest forecasts from the Office for Budget Responsibility (OBR). This forecast will be in addition to that published for the Spring Statement and fulfil the obligation for the OBR to produce at least two forecasts in a financial year, as is required by legislation.

The OBR has executive responsibility for producing the official UK economic and fiscal forecasts, evaluating the government’s performance against its fiscal targets, assessing the sustainability of and risks to the public finances and scrutinising government tax and welfare spending.
 

It is important to know if HMRC is holding money that belongs to you. For example, if you have paid too much tax to HMRC, you may be able to claim a tax refund (also known as a tax rebate). Overpayments can happen for a number of reasons, including changes in your employment, paying tax using the wrong startegy or not claiming eligible expenses.

The process for claiming a refund depends on your circumstances, including whether you complete a self-assessment tax return and the type of income or expense involved. HMRC provides an online service to help you find out what you need to do if you have overpaid tax.

You may be able to claim a refund if you have paid too much tax on income from a job, job-related expenses such as working from home, fuel, work clothing or tools, a pension, overpayments revealed by a  self-assessment tax return or a redundancy payment. Refunds may also be available for UK income taxed while living abroad, interest from savings or payment protection insurance (PPI), income from a life or pension annuity, foreign income, or UK income earned before leaving the UK.

HMRC offers an online service at www.gov.uk/claim-tax-refund/y that allows you to check whether you are eligible and, in many cases, submit a claim.

If you have already claimed a tax refund, you can use HMRC’s guidance to check when you should expect a response.
 

The government has announced a review into access to face-to-face banking services as concerns continue to grow over the impact of bank branch closures on local communities, older customers and small businesses.

Over recent years, many high street bank branches have closed as more customers move towards online and mobile banking. While digital banking has become increasingly popular, there remains significant concern that some individuals and businesses still rely heavily on in-person banking facilities for cash handling, account support and day-to-day financial transactions.

The review will examine whether existing arrangements continue to provide adequate access to banking services across the UK, particularly in rural areas and smaller towns where branch closures can leave customers with limited alternatives. It will also consider how shared banking hubs and other community banking solutions are performing and whether additional measures may be needed.

Small businesses are likely to take a close interest in the review, especially firms that regularly deal with cash or require local banking support. For many business owners, the loss of nearby branches can increase administration time and create additional security and travel concerns when paying in cash or obtaining change.

Consumer groups have also highlighted the challenges faced by elderly and vulnerable customers who may be less comfortable using digital banking services or who value personal contact when dealing with financial matters.

The government has stated that maintaining appropriate access to banking services remains important for consumers, businesses and local economies, and the findings of the review may help shape future banking access policies across the UK.

The government has announced a package of measures intended to help motorists and businesses manage rising fuel costs following disruption linked to the conflict in Iran.

As part of the package, the temporary 5p fuel duty cut has been extended until the end of 2026. The government estimates that the extension will save the average driver around £120 since 2025 and will mean that fuel duty on petrol and diesel remains at its lowest level for more than 16 years.

Additional support has also been announced for the haulage sector. Hauliers will benefit from a 12-month road tax holiday, with qualifying vehicles paying just £1 on renewal. The government stated that this could save up to £600 for a typical heavy goods lorry and as much as £912 for largest vehicles on our roads.

The measures also see a reduction of over one third in the fuel duty charged on red diesel until the end of the year. Farmers, rail freight operators and other qualifying users are expected to benefit from the reduced rate, which the government says is now at its lowest level for more than 20 years.

Marking the announcement, the Prime Minister Sir Keir Starmer said:

‘I know many are feeling the pressure of energy and fuel costs, and are worried about how the conflict in Iran will affect their finances. Because when global events drive up prices, it’s working people who feel it first. 

That’s why this government is stepping in to keep fuel costs down for millions of drivers and putting money back in the pockets of working people.’

The Chancellor of the Exchequer, Rachel Reeves updated Parliament on 21 May 2026 on the Government’s economic response to the war in Iran and the wider measures being taken to support households and businesses with rising cost pressures. One of the measures announced was an increase in approved mileage rates for those using their own vehicles for work.

The approved mileage rates for cars and vans will increase from 45p per mile to 55p per mile. This increase has been backdated to the start of the tax year, 6 April 2026. This rate applies only to the first 10,000 business miles in each tax year, with the approved mileage rate remaining at 25p per mile for any additional mileage over the threshold. The change is intended to support employees and the self-employed who rely on travel for work. It has been confirmed that all other mileage rates remain unchanged for the time being although this may be reviewed again at the next Budget.

If an employer reimburses mileage at less than the approved rates, the employee may claim the shortfall through Mileage Allowance Relief (MAR). This ensures tax relief is given on the difference. For example, if an employer reimburses 35p per mile, tax relief may be claimed on the remaining 20p per mile for qualifying business journeys (excluding ordinary commuting). If no mileage allowance is paid then tax relief can usually be claimed on the full 55p per mile rate (up to 10,000 business miles).

The approved mileage rates for motorcycle journeys remain at 24p per mile and for bicycle journeys at 20p per mile. Where employees carry colleagues on business journeys, employers may also pay an additional 5p per passenger per mile. There are no overriding distance limits for these payments.

The Government has announced a new package of measures designed to help households manage rising living costs during the summer months, as concerns continue over inflation, fuel prices and household spending pressures.

The package, described as the “Great British Summer Savings Scheme”, includes free bus travel for children aged 5 to 15 on participating local bus services throughout August in England. The Government has stated that the measure is intended to support families during the school holidays and help reduce travel costs at a time when many household budgets remain under pressure.

Alongside the transport support, the Government has also announced plans to reduce tariffs on a range of imported food products. While the full list is still to be confirmed, reports suggest that items such as biscuits, chocolate, dried fruit and nuts may be included. Ministers estimate that the tariff reductions could save consumers more than £150 million annually.

The measures come against a backdrop of continued economic uncertainty and concerns that rising global tensions could increase inflationary pressure later this year, particularly through higher energy and fuel costs.

For small businesses, the impact may vary. Hospitality, tourism and leisure businesses could benefit from increased summer spending and higher visitor numbers, while retailers may see some improvement in consumer confidence if household costs ease temporarily.

Business owners may nevertheless wish to continue monitoring:

While the latest measures may provide short-term support, many businesses are still operating in a challenging economic environment.