In this edition’s eNews, there is news on the Chancellor’s announcements at the Spring Forecast, news on Making Tax Digital, and calls to scrap the planned Visitor Levy from the hospitality industry. We also have warnings over the impact of the Employment Rights Act and the latest advisory fuel rates to update you on.
- Chancellor says plan is right despite uncertain backdrop to Spring Forecast Statement
- Making Tax Digital for Income Tax biggest tax change since self assessment
- Government urged to scrap ‘unfair holiday tax’
- Employment Rights Act risks being a handbrake on hiring
- Advisory fuel rates for company cars
Chancellor says plan is right despite uncertain backdrop to Spring Forecast Statement
Chancellor Rachel Reeves insisted she has the ‘right economic plan’ for the UK in her Spring Forecast Statement announcement.
Ms Reeves acknowledged the economic uncertainty caused by war in the Middle East and pledged to chart a course through the turbulence.
The Chancellor’s speech focused on economic growth, the cost of living and public borrowing.
The Office for Budget Responsibility (OBR) cut its growth forecast for this year to 1.1% from 1.4%. However, it said the economy will grow faster in 2027 and 2028.
The OBR’s forecast shows GDP per person is now set to grow more than was expected in the Autumn Budget, with growth of 5.6% over the course of this Parliament.
In addition, Ms Reeves said she was cutting the cost of living, including reducing people’s energy bills by £150 and freezing rail fares.
The OBR’s forecast shows inflation, borrowing and debt interest are falling, whilst investment is rising.
The Chancellor also said she has cut public borrowing, which the OBR said is down by nearly £18 billion compared to the autumn, with borrowing this year set to be the lowest in six years and falling below the G7 average.
The Chancellor concluded:
‘My plan is the right one. I am in no doubt about how great the rewards can be if we stay the course. The forecasts today confirm that the choices this government has made are the right ones.
‘Stability in our public finances, interest rates and inflation falling, living standards rising, more children lifted out of poverty, more appointments in our NHS, more investment in our infrastructure, a growing economy and more money in the pockets of working people.’
Internet link: GOV.UK
Making Tax Digital for Income Tax biggest tax change since self assessment
The introduction of Making Tax Digital (MTD) for Income Tax this April will be the biggest change to the UK’s tax system since self assessment, says the Low Incomes Tax Reform Group (LITRG).
From 6th April 2026, taxpayers with more than £50,000 of gross income from self-employment and/or rental income in the 2024/25 tax year will need to comply with the new rules from that date.
Unless they are exempt, taxpayers who meet the income threshold will be required to follow these new rules, which will include keeping digital records, submitting quarterly updates of their income and expenses, and filing an annual tax return using commercial software.
According to HMRC’s data, more than 200,000 unrepresented taxpayers will be required to follow the new rules.
The LITRG has published new guidance to help taxpayers navigate the change.
Victoria Todd, Head of LITRG, said:
‘MTD is the biggest tax change since self assessment and with just over two months to go, time is running out to get ready.
‘Many taxpayers will have the support of a tax adviser or accountant to guide them through the process. But for those who can’t afford professional tax advice, the new rules may seem confusing and the requirements daunting.
‘We want to make it as easy as possible for taxpayers to understand whether the rules apply to them and what they need to do if that is the case.’
Internet link: LITRG website
Government urged to scrap ‘unfair holiday tax’
Over 200 hospitality and leisure CEOs have urged the government to scrap plans for a Visitor Levy in England.
In a letter to the Chancellor, they warn that the proposed holiday tax will ‘hit families hardest, put jobs at risk and drain money from local businesses and communities’.
Signatories to the letter warn that ‘holidays are for relaxing, not taxing’, with the proposed tax meaning tourists would face an extra £100 or more for a two-week holiday in the UK.
The letter says this could force families to shorten trips, skip travel altogether or head overseas, spending their money elsewhere.
The letter also says there will be significant damage to local communities across England that rely on tourism for survival, as fewer visitors mean fewer local jobs and lower spending at local businesses.
Allen Simpson, Chief Executive of UKHospitality, said:
‘Holidays are for relaxing – not taxing.
‘Whether you enjoy a city break, a rural retreat or building sandcastles on your beach holiday, you’re already paying your fair share of tax.
‘In fact, it’s one of the highest tax rates for visitors in Europe and the holiday tax will only increase that further.
‘We are so lucky to enjoy these wonderful islands, and we should be encouraging people to visit every part of our country – not taxing them for doing so.
‘The government needs to scrap the holiday tax.’
Internet link: UKHospitality website
Employment Rights Act risks being a handbrake on hiring
More than a third of UK employers plan to reduce the recruitment of permanent staff due to the Employment Rights Act’s (ERA) reforms, says the Chartered Institute of Personnel and Development (CIPD).
A survey published by the CIPD showed that nearly three quarters of employers believe their employment costs will increase because of measures introduced under the ERA.
In addition, more than half of employers expect workplace conflict to increase because of at least one of the changes being introduced.
The survey showed that overall hiring intentions remain at their lowest level on record outside the first year of the pandemic.
Ben Willmott, Head of Public Policy at the CIPD, said:
‘Against a backdrop of low business confidence and already weak hiring intentions, our research suggests there is a real risk that the ERA measures will act as a further handbrake on job creation and recruitment.
‘In response, it’s important that government acts to try and mitigate these potential negative consequences, including through meaningful consultation and where necessary compromise on key measures still to be decided in secondary legislation.
‘We need to see a major communication campaign from government to ensure smaller businesses in particular are aware of, understand and can prepare for the new legal obligations and know when they come in to affect.’
Internet link: CIPD website
Advisory fuel rates for company cars
New company car advisory fuel rates have been published and took effect from 1 March 2026.
The guidance states: ‘you can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.
The advisory fuel rates for journeys undertaken on or after 1 March 2026 are:
| Engine size | Petrol |
| 1400cc or less | 12p |
| 1401cc – 2000cc | 14p |
| Over 2000cc | 22p |
| Engine size | Diesel |
| 1600cc or less | 12p |
| 1601cc – 2000cc | 13p |
| Over 2000cc | 18p |
| Engine size | LPG |
| 1400cc or less | 10p |
| 1401cc – 2000cc | 12p |
| Over 2000cc | 19p |
HMRC guidance states that the rates only apply when you either:
- reimburse employees for business travel in their company cars
- require employees to repay the cost of fuel used for private travel.
You must not use these rates in any other circumstances.
The Advisory Electricity Rate for fully electric cars is below. Electricity is not a fuel for car fuel benefit purposes.
| Advisory Electricity Rate | |
| Home Charger | 7p |
| Public Charger | 15p |
If you would like to discuss your company car policy, please contact us.
Internet link: GOV.UK AFR
For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.