Motor Vehicles: From April 2025, most double cab pickups with a payload of 1 tonne or more will be classified as cars for capital allowance purposes, limiting tax benefits compared to their current classification as goods vehicles. However, vehicles acquired through contracts signed before 1 April 2025 (for companies) or 6 April 2025 (for non-corporate businesses) can still be treated as goods vehicles if the purchase is completed by 1 October 2025. Additionally, the 100% first-year allowance for zero-emission cars is extended until 31 March 2026 for corporation tax and 5 April 2026 for income tax.

 

Making Tax Digital (MTD) for Income Tax: The MTD initiative will require businesses to maintain digital records and submit quarterly summaries of income and expenses to HMRC through compatible software. Starting in April 2026, these requirements will initially apply to sole traders and landlords with combined income over £50,000, reducing to £30,000 in 2027 and £20,000 by the end of the parliamentary term. Eligible businesses can opt into HMRC’s beta testing programme for early adoption.

 

Electronic Invoicing: A consultation on electronic invoicing (e-invoicing) is set for Spring 2025 to explore how HMRC can encourage investment in e-invoicing. This is part of the government’s broader digital strategy, with mandatory e-invoicing likely in the future.

 

Business Rates Relief: For the 2025/26 year, retail, hospitality, and leisure (RHL) businesses will benefit from a 40% reduction in business rates. The small business tax multiplier will also be frozen, applying to properties with a rateable value under £51,000. From 2026/27, the government plans to permanently reduce tax rates for RHL properties with rateable values below £500,000 as part of long-term support for these sectors.