HMRC notices

HMRC has published new guidance explaining the penalties that digital platform operators may face for failing to meet their tax reporting obligations. The guidance, published on 16 October 2026, clarifies how the existing rules for digital platform operators apply.

The rules cover websites and apps that connect sellers with customers to supply goods or services and can determine the amounts paid to sellers. Operators may need to register with HMRC, carry out due diligence and report information about sellers annually.

Penalties include:

• Late or missing reports: up to £5,000 for failing to submit required information to HMRC or provide it to reportable sellers by the deadline.
• Continued non-compliance: further penalties of up to £600 a day if an obligation remains outstanding 30 days after the initial penalty is charged.
• Inaccurate reports: up to £100 for each seller whose information is inaccurate or incomplete in specified circumstances, including where reasonable care has not been taken.
• Record-keeping failures: up to £5,000, while failure to notify HMRC of reporting status can attract a penalty of up to £1,000.
• Due diligence failures: up to £100 for each seller concerned.

Anyone running online platforms should ensure their registration, record-keeping and reporting procedures meet the necessary requirements.

New rules for Plastic Packaging Tax (PPT) will take effect from 1 April 2027, changing how businesses account for chemically recycled plastic and removing pre-consumer plastic waste as an eligible source of recycled content.

Under the new rules, manufacturers and importers will be able to use a mass balance approach to attribute chemically recycled plastic to packaging components. This allows recycled content to be calculated and allocated through a manufacturing process where recycled and virgin materials are mixed.

Using the mass balance approach will be optional. However, businesses that do not use it must treat chemically recycled plastic as non-recycled (virgin) plastic when calculating recycled content for PPT purposes.

To qualify, the supply chain must be covered by a compliant third-party certification scheme. Businesses will need to check their suppliers’ certification, retain relevant certificates and attribution declarations, and keep supporting records for six years.

Plastic packaging containing at least 30% qualifying recycled plastic remains exempt from PPT, although it still counts towards the 10-tonne registration threshold.

Businesses should review their supply chains, record-keeping procedures and packaging materials ahead of the changes.

Cryptoassets can create unexpected tax liabilities. HMRC’s guidance highlights several areas where mistake can be made.

• Assuming crypto-to-crypto exchanges are tax-free. Exchanging one type of cryptoasset for another can count as a disposal for Capital Gains Tax (CGT) purposes.
• Forgetting that spending crypto can trigger CGT. Using tokens to buy goods or services may count as disposing of them.
• Assuming all gifts are tax-free. Giving cryptoassets away can trigger CGT, although gifts to a spouse or civil partner are generally treated differently.
• Ignoring income from mining or staking. Cryptoassets received from mining, staking, lending or decentralised finance (DeFi) may be taxable as income, depending on the circumstances.
• Overlooking employment-related crypto payments. Tokens received from an employer may be subject to Income Tax and National Insurance contributions.
• Failing to keep transaction records. Investors should retain details of purchases, disposals, quantities, dates, costs and values. Exchange reports may not contain everything needed for tax calculations.
• Using incorrect valuations. Transactions and gains must be calculated in pounds sterling, using an appropriate and consistent valuation method.
• Failing to report taxable income or gains. Investors should check whether they need to report cryptoasset activity on a self-assessment tax return. Those who discover unpaid tax from earlier years can use HMRC’s cryptoasset disclosure service.

Businesses using the Trader Support Service (TSS) to move goods between Great Britain and Northern Ireland need to prepare for a new platform launching soon. From 20 October 2026, all goods movements must be submitted using the new TSS platform.

Businesses are being asked to pre-enrol before the switchover. From 1 October, existing TSS users will receive an email explaining how to pre-enrol for the new platform. They will also be given access to a test environment so they can familiarise themselves with the new system before it becomes mandatory.

The TSS is a free digital service that supports businesses moving goods between Great Britain and Northern Ireland and helps them comply with the Windsor Framework.

Businesses will need to create a new password and check that their business details and permissions are up to date. HMRC says that updating a profile should generally take between 5-30 minutes, depending on the size of the business and the information available.

From 20 October, the existing TSS platform will no longer accept new goods movements. Businesses that have not completed the switchover could therefore be unable to submit declarations through the service.

The customs processes and legal obligations for businesses are not changing. However, the new platform is intended to provide improved functionality and support.

HMRC has published an updated list of deliberate tax defaulters. The list includes individuals, businesses and companies, detailing the amounts on which penalties are due and the exact penalties charged.

The details of a tax defaulter will be held on HMRC’s website for a maximum of 12 months from the date they are first published and are not stored within the National Archives.

The current list of deliberate tax defaulters (published on 24 September 2026) includes a Northampton-based business support company with an undeclared tax bill of over £9.1m and penalties of over £4.4m, alongside a retail sales company based in Nelson with an undeclared tax bill of almost £4.7m and penalties of almost £3.3m. There were also many smaller penalties listed for local trades and businesses, such as takeaways, convenience stores, letting agents, dog breeders, and mechanics.

A deliberate defaulter is defined as a person who incurs a relevant penalty for either deliberate errors in their tax returns or deliberately failing to comply with their tax obligations.

HMRC is legally permitted to publish these details where they have carried out an investigation, the person has been charged one or more penalties for deliberate defaults, and those penalties involve tax exceeding £25,000. Taxpayers who make an unprompted disclosure, or a satisfactory fully prompted disclosure, are not affected by these publication rules.

Businesses importing certain carbon-intensive goods into the UK will face a new carbon tax from 1 January 2027, when the Carbon Border Adjustment Mechanism (CBAM) comes into effect.

CBAM will apply to specified goods imported from outside the UK in the aluminium, cement, fertiliser, hydrogen, and iron and steel sectors. The tax is intended to put a comparable carbon price on imported goods to that paid by UK manufacturers. Not every product within these sectors is covered, so businesses will need to check the relevant commodity codes. This should help ensure that these UK decarbonisation efforts lead to a true reduction in global emissions rather than simply displacing carbon emissions overseas.

The person liable for CBAM will generally be the importer named on the customs declaration. Businesses importing CBAM goods will need to keep records, including information about the weight and emissions associated with the goods, and may need to register with HMRC.

A £50,000 threshold applies when determining whether registration is required. Businesses must monitor both a forward-looking test of expected imports over the next 30 days and a backward-looking test looking at the value of relevant imports over the preceding 12 months. If a person meets either test, they become liable to register.

The first CBAM accounting period will run from 1 January to 31 December 2027, with the first return and payment due by 31 May 2028. From 2028, accounting periods will transition to a quarterly cycle. For CBAM goods imported during the first calendar year of CBAM the backward looking test is only required to 1 January 2027.

Businesses importing potentially affected goods should check their position now and make sure they have the necessary records and systems in place before CBAM takes effect.

The tax treatment of some crypto assets is set to change under draft legislation for Finance Bill 2026–27. The proposed changes include new rules for qualifying stablecoins, crypto asset loans and liquidity pools.

Eligible stablecoins are expected to be treated more like money for Capital Gains Tax (CGT), Income Tax and Corporation Tax purposes. The government intends to introduce rules to provide greater certainty over how these assets are taxed, with the changes expected to apply from April 2027.

New rules will also apply to certain transactions involving cryptoasset loans and liquidity pools. Qualifying disposals will generally be treated as taking place on a ‘no gain, no loss’ basis for CGT purposes. This is intended to prevent a taxable gain or loss arising where there has not been an economic disposal of the cryptoasset.

The measures follow calls for clearer tax rules as the use of crypto assets continues to develop. HMRC has published draft legislation and supporting material for technical consultation, with further guidance expected before the new rules take effect.

The tax rules concerning what constitutes a distribution for tax purposes have remained largely unchanged since Corporation Tax was introduced in 1965. HMRC has recently published a consultation looking at possible changes to bring the rules more closely into line with modern commercial practices.

The consultation considers seven areas where the existing rules may create differences in tax treatment or uncertainty. The aim is to make the rules clearer and more consistent, while reducing unintended differences in tax treatment and the risk of errors and non-compliance.

The areas being considered include reductions of share capital, demergers, distributions from non-UK companies, loans to participators, purchases of own shares and the Transactions in Securities rules.

The consultation is mainly focused on shareholders within the charge to Income Tax, including individuals and trusts. The proposals are not intended to affect corporate shareholders directly.

HMRC also wants to ensure that genuine commercial activities and legitimate company reorganisations are not adversely affected and that the wider implications for growth and investment are taken into account.

For companies and their shareholders, the proposals are worth watching. They could ultimately affect the tax treatment of a number of transactions between companies and their owners, including capital reductions, company purchases of own shares and some company reorganisations.

At this stage these are proposals for consultation rather than confirmed changes to the tax rules.

The consultation closes on 14 September 2026. The government will then consider the responses and publish a summary. Further consultation may take place before any changes are introduced.

If you become liable to pay a tax or register for a tax that HMRC has not already been informed about, you must notify HMRC within the relevant time limit. Failing to do so can result in a financial penalty in addition to the tax and any interest due.

A failure to notify can arise in a range of situations, including when a business exceeds the VAT registration threshold, a company becomes liable for Corporation Tax or an individual first becomes liable to Income Tax when self-employment profits or investment income first arises. In some cases, businesses must also register before carrying out certain taxable activities.

HMRC calculates penalties according to the circumstances of the failure. Factors to be considered include whether the failure was deliberate, whether it was disclosed voluntarily before HMRC identified it, and how much assistance was provided during the disclosure process. Taxpayers who make an unprompted disclosure and fully cooperate with HMRC can often receive significantly lower penalties than those who wait for HMRC to discover the issue.

The level of penalty depends on the type of failure and the taxpayer’s behaviour. Penalties can range from a percentage of the tax liability that should have been reported, with lower penalties generally applying where a taxpayer makes a voluntary disclosure and cooperates with HMRC. Higher penalties can apply where the failure was deliberate or where HMRC discovers the issue before the taxpayer comes forward. In the most serious cases, penalties can be up to 100% of the tax due. HMRC will not normally charge a penalty where there is a reasonable excuse, provided the taxpayer notified HMRC without unreasonable delay after the reasonable excuse ended.

If you think you may have failed to notify HMRC of a tax liability, it is usually better to act promptly, and we would be happy to advise you. Coming forward voluntarily and providing complete information can reduce the level of any penalty and help resolve matters more quickly. 

What happens if you discover a mistake on your tax return? The good news is that errors can usually be corrected, but it is important to take action as soon as possible to avoid paying the wrong amount of tax or missing out on a possible refund.

If you realise that you have made an error after submitting your self-assessment tax return, you can normally amend your return within 12 months of the self-assessment filing deadline. The amendment can be made online or by submitting a revised paper return. For example, your self-assessment for the 2024-25 tax year can usually be amended up to 31 January 2027.

If you amend your return online, your tax calculation will be updated immediately and will show whether you owe additional tax or are entitled to a repayment. Any changes may also affect payments on account.

If the 12-month amendment period has passed, you will need to contact HMRC in writing. This applies if you need to report income that was missed from your return or if you believe you have paid too much tax and want to claim overpayment relief.

Overpayment relief claims can generally be made up to four years after the end of the relevant tax year. You must explain why you believe the tax has been overpaid, provide details of the amount involved, and confirm that the information provided is correct and complete.