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Business Companion Newsletter October 2026
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Welcome to our Business Companion Newsletter for October 2026

Get your Personal Tax Return prepared now!
We are collating 2025/26 information for our clients now. The deadline for submissions is 31st January 2027. 

You can find a useful template for the information that we need on our website: Download our handy Personal Tax Organiser (pdf)

October 2026

• Mileage Rate Increase to 55p per mile

• Identity Verification for PSCs

• Do I need to sign up for MTD?

• The harshest Corporation Tax rate

 

Mileage Rate Increase to 55p per mile


The HMRC have kindly recognised the increased costs of business driving with a new rate of 55p for the first 10,000 business miles.  This new rate applied from 6th April 2026.  It applies only to self employed and employed workers, who are using a privately-owned petrol or diesel car or van for business travel.  The rate reduces to 25p for miles from 10,001 in a single tax year.  You don’t need to record the threshold mileage as such.  As long as a worker has evidence of journeys and the amount paid in the 2026/27 tax year is below £5,500 the evidence is provided by the payments themselves. You cannot claim separately for fuel, tax, MOT, repairs, etc. – the mileage rate is meant to cover all running costs.

Rates for privately-owned fully Electric and Hybrid cars have also altered to 55p and 25p.  Company Electric Cars Home charging can be repaid at 7p per mile or for public charging at 15p per mile.

You can get more details from our website:
Tax Free Mileage Allowances
Minimising Tax on Company Cars (Helpsheet)

There are many more tax briefings that you might find helpful on our website.

Identity Verification for PSCs

Over the past year, we have explained the new process of Identity verification for Directors at Companies House (see our April Newsletter). For each company, the process is completed by submitting the annual confirmation statement to Companies House including the 11 digit personal codes for all directors.  Without the personal codes the confirmation statement is not accepted. Each confirmation statement now costs £50 and must be submitted during a set 14 day window.  The deadline has now passed for most companies. 

Where an individual is both a director and a Person with Significant Control (PSC), the same Companies House personal code must be submitted twice: once through the confirmation statement in relation to the directorship, and then a second time in respect of the PSC role. This has to be submitted using a completely separate PSC verification service – and only after the submission window for that PSC role has opened. Annoyingly, these submission windows (again 14 days) do not necessarily coincide with the window for the confirmation statement. 

The Companies House emails advising companies to comply seem overly threatening: ‘What happens if PSCs don’t comply on time? They may face prosecution and a fine through the courts, or a financial penalty. In the future, we’ll publish a note against their name, which will appear on this company’s public record on the Companies House register.’ We are not aware of any such action against any of our clients. 

Note: all new Directors and PSCs must have gone through the identity verification process before they can be appointed at Companies House. 

You can check whether your identity verification is complete by looking at the Companies house register https://find-and-update.company-information.service.gov.uk/ Type in your company name – then click on the People Tab – and check against Officers and Persons with Significant Control to see that identities have been verified. If you need any help just get in touch

Do I need to sign up for MTD? 

The first Making Tax Digital for income tax (MTD) quarterly update filing deadline of 7 August has now passed. HMRC has recently announced that it will sign up any remaining taxpayers it believes to be in scope of MTD for 2026/27. This only affects those taxpayers who are mandated for 2026/27 – anyone required to join in April 2027 or 2028 is still expected to sign themselves up (or ask their agent to do this) in the usual way.

Once signed up by HMRC, the taxpayer will receive a letter or digital message (depending on their contact preferences) advising them what this means and the next steps they need to take. This will include all the usual steps to get ready to use MTD, such as finding compatible software, starting to keep digital records etc. 

You need to sign up for Making Tax Digital for Income Tax if all of the following apply:
  • you’re a sole trader or a landlord registered for Self Assessment 
  • you get income from self-employment or property, or both 
  • your qualifying income is more than the relevant threshold for the tax year (see below)
When you need to start using Making Tax Digital for Income Tax depends on your self-employment and property rental income within a tax year. If your qualifying income is over:
  • £50,000 for the 2024-2025 tax year, you should’ve started using Making Tax Digital for Income Tax from 6 April 2026 
  • £30,000 for the 2025-2026 tax year, you will need to use it from 6 April 2027
  • £20,000 for the 2026-2027 (current) tax year, you will need to use it from 6 April 2028
Partnerships will also need to use Making Tax Digital for Income Tax in the future – no timelines have been set yet. 

Do get in touch if you need help with setting up for MTD.

The Harshest CorporationTax rate

The Corporation Tax rate for companies has been 25% for three years. But how it is made up is not understood.

The rate for small companies is only 19%.  A marginal rate of 26.5% applies to profits between £50k and £250k.  Above £250k the rate (strangely) drops to 25%. 

So the harshest rate lies between £50k and £250k.  It is one of many barriers to growth in our tax system.  It becomes worthwhile to try not have profits falling in the £50k to £250k gap.
 
It is particularly advantageous to make employer pension contributions if your company profits are likely to fall in the £50k to £250k gap.  The extra 7.5% Corp Tax you can legitimately avoid paying can then be saved to provide other benefits when the company’s profits are perhaps not so high.   
 
If you run your own company, you need to consider the tax relief the company receives for the pension contributions it pays for its employees. The tax deduction is only given for the accounting period in which the contributions are actually paid, the cost cannot be accrued or pre-paid. While employer pension contributions can be used to bring corporate profits down, the pension payment must be made within the accounting year (it cannot be accrued back).  This means thinking about the potential profits before rather than after the year end..

Need Help?


Please contact us if we can help you with these or any other tax or accounts matters.

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About Us


Simple Accounting Limited offers a cost effective Business Companion service to business owners who use MYOB, Acclivity, Mamut, Quickbooks or Xero.

‘All clients using these software packages can benefit from our support. Visit our website www.simpleaccounting.co.uk for a look at the resources on offer.’
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