In this week’s eNews, there is news on what businesses want to see from the Autumn Budget, the introduction of Vaping Products Duty next year, a reminder to young people to claim their tax-free savings, and news on how the Chancellor should use the Autumn Budget to reform the tax system. There is also a warning to the government over tax avoidance laws and news on HMRC’s use of ‘big data’ to update you on.
- Budget must give UK business a competitive edge
- Countdown to Vaping Products Duty begins
- Over 750,000 young people yet to claim savings
- Chancellor should use budget to reform tax system, IFS says
- New tax avoidance law risks missing target, warns CIOT
- HMRC brings in extra £4.6 billion using ‘big data’ system
Budget must give UK business a competitive edge
The Autumn Budget must sharpen the UK’s competitive edge to stay ahead of the pack in an increasingly dog eat dog world, says the British Chambers of Commerce (BCC).
The BCC is calling for immediate action to cut the costs deterring investment, simplify regulations to unleash business and update its strategic offer.
The business group makes over 40 recommendations in a new report.
These include committing to no further increase in taxes that add to labour costs.
It also wants to see the axing of the windfall tax on oil and gas to address energy costs for business and the government providing a clear strategy for the North Sea’s transition to a renewable future.
In addition the BCC says the Budget should put rocket boosters under our economic diplomacy to unlock the full potential of ‘Brand Britain’.
Shevaun Haviland, Director General of the BCC, said:
‘There is also growing speculation about what’s coming in the Autumn Budget, which is still weeks away. This is eroding business confidence further as the government’s messaging of ‘tough choices’ adds to the fear.
‘But the Budget can be the decisive moment we need to back British business and put the economy on the front foot.
‘The UK is bursting at the seams with innovative ‘can-do’ businesses that are eager to grow and make the most of the UK’s extraordinary talent, creativity and technical expertise.’
Internet link: BCC website
Countdown to Vaping Products Duty begins
There is now less than a year until the UK Government introduces Vaping Products Duty (VPD) and vaping duty stamps (VDS) on 1 October 2026.
VPD, a new excise duty, will apply to all vaping liquids (or e-liquids) sold or supplied in the UK, at a flat rate of £2.20 per 10ml and VDS must be attached to individual vaping products.
From 1 April 2026, any business involved in the manufacture or importation of vaping products, or storage of duty-suspended vaping products, must apply for approval from HMRC. This will enable them to continue operating lawfully in the UK once VPD and the VDS Scheme come into effect.
With just six months until approval registration opens, HMRC is urging all affected businesses to prepare now to avoid disruption as approval may take up to 45 working days.
What this means for businesses:
- UK manufacturers of vaping products must apply for approval for both VPD and the VDS Scheme.
- Warehouse keepers will be able to apply for VDS Scheme approval directly.
- Overseas manufacturers must appoint a UK representative to apply for the VDS Scheme on their behalf.
- Importers will be required to pay the new duty. They must also register for VPD and the VDS Scheme if they are acting as a UK representative for an overseas manufacturer.
Rachel Nixon, HMRC’s Director of Indirect Tax, said:
‘We are working closely with the vaping sector ahead of these changes. Businesses are encouraged to visit GOV.UK and search ‘prepare for vaping duty’ to access guidance and updates. Early preparation is essential to ensure a smooth transition and to avoid disruption to operations.’
Internet link: HMRC press release
Over 750,000 young people yet to claim savings
Over 750,000 18-to-23-year-olds have yet to claim their matured Child Trust Funds, according to HMRC.
The tax authority says that the accounts are worth £2,242 each on average.
Child Trust Funds are long term, tax-free savings accounts which were set up for children born between 1 September 2002 and 2 January 2011 with an initial government deposit of at least £250.
Young people can take control of their account at 16, but once the account holder turns 18 it matures, and they can decide whether they want to withdraw the money or re-invest it.
Young people can use the GOV.UK locator tool to find their Child Trust Fund quickly and for free. It requires the young person’s National Insurance number and date of birth.
More than 563,000 young people went online to find their Child Trust Fund in the 12 months to the end of August 2025, says HMRC.
It takes about five minutes to submit a request to find a Child Trust Fund using the online tool and, for most, less than three weeks to hear back.
Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said:
‘If you’re between 18 and 23, you could be sat on a savings payout and not even realise it. Just search ‘find my Child Trust Fund’ on GOV.UK to find your savings account today.’
Internet link: HMRC press release
Chancellor should use budget to reform tax system, IFS says
Chancellor Rachel Reeves should use the Autumn Budget to reform the UK’s tax system, says the Institute for Fiscal Studies (IFS).
The think tank says this would help Ms Reeves to raise more revenue while limiting the hit to the economy.
The IFS warns the Chancellor against raising the levels of existing taxes to bring in the estimated £30 billion she requires to stay on course for her targets to repair the public finances.
Changes to wealth-related taxes, including Capital Gains Tax, would be more effective than the introduction of an annual wealth tax, the think tank added.
Isaac Delestre, a Senior Research Economist at IFS, said:
‘Revenue-raising seems likely to be a major goal of the coming Budget. But if Rachel Reeves limits her ambition to collecting more revenue, she will have fallen short.
‘Almost any package of tax rises is likely to weigh on growth, but by tackling some of the inefficiency and unfairness in our existing tax system, the Chancellor could limit the economic damage.
‘The last thing we need in November is directionless tinkering and half-baked fixes. There is an opportunity here. The Chancellor should use this Budget to take real steps down the road towards a more rational tax system that is better geared to promoting the prosperity and well-being of taxpayers.’
Internet link: IFS website
New tax avoidance law risks missing target, warns CIOT
New legislation aimed at tackling rogue tax agents and those pushing tax avoidance schemes won’t catch all of those it is aimed at, warns the Chartered Institute of Taxation (CIOT).
Instead the measures could make it harder for some taxpayers to get the advice they need to comply with tax laws, the Institute added.
The CIOT argues that the current proposals are not well targeted, imposing potentially unworkable conditions on tax agents. Meanwhile, many of the ‘bad actors’ who are the real target of these measures will be out of scope and able to continue their abuse of the system, it adds.
The Institute says it is concerned that, without changes, the proposals will lead many reputable advisers to withdraw from giving advice where the meaning of complex tax legislation is unclear, or where the potential tax liability is high.
Ellen Milner, CIOT Director of Public Policy, said:
‘The government are right to be taking a robust approach to those who continue to devise, promote or sell mass-marketed tax avoidance schemes. There should be no place for such people and their schemes in the tax services market.
‘However, the current proposals are set to miss their target. According to HMRC, the market for tax avoidance schemes is now dominated by about 20 operators. These people are not mainstream tax and accountancy professionals and are largely based overseas. The legislation as drafted will struggle to capture these people.’
Internet link: CIOT website
HMRC brings in extra £4.6 billion using ‘big data’ system
HMRC brought in an extra £4.6 billion in tax revenue last year by using its ‘big data’ system.
The tax authority’s Connect system uses data from a wide range of financial sources to analyse tax returns and detect potential evasion.
In a response to a freedom of information request from law firm Pinsent Masons, HMRC said it generated on average £3.4 billion in additional annual yield from Connect cases.
However, this rose by over a third in the 2024/25 tax year when Connect generated approximately £4.6 billion.
Connect, which was introduced in 2010, has grown in scale over the last 15 years to become one of the largest datasets held by the UK government.
It has now become a key part of tax investigations, with around 4,300 HMRC staff now using it.
The increasing scale of the Connect system allowed HMRC to conduct more than half a million cases in the last year alone.
Ian Robotham, a tax expert at Pinsent Masons, said:
‘HMRC has spent time building up the amount of data sources that it can access and analyse.
‘The algorithms that it uses allows HMRC to spot anomalies that would otherwise go unnoticed by the human eye.
‘With thousands of HMRC staff now using Connect, taxpayers are facing a level of oversight that would have been unthinkable just a few years ago.’
Internet link: Pinsent Masons website
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