September 2026 Newsletter

The Autumn Budget date is confirmed for 28 October 2026, and decisions made before it lands will matter more than those made after. This month’s newsletter explains what that means in practical terms for clients with assets, disposals, or transactions under consideration, alongside September compliance obligations that need attention now.

New for September: HMRC is already receiving data on cryptoasset activity under the new international reporting framework, and Prime Minister Burnham has signalled that a major social care overhaul is coming, likely funded by tax rises. Both have implications for personal tax planning that are worth understanding before the Budget.

As ever, if anything here raises questions about your position, please contact the Mercian team.

The Autumn Budget: Eight Weeks Away

The first Budget under Prime Minister Andy Burnham and Chancellor John Healey takes place on Wednesday 28 October 2026. The Chancellor confirmed the date on 31 July, making this the earliest UK Budget since October 2021.

No specific tax measures have been announced. The Government has repeated its manifesto pledge not to raise the headline rates of income tax, National Insurance, or VAT for working people. That commitment leaves considerable room for change elsewhere, and the signals that have emerged point clearly toward a Budget focused on wealth and investment returns rather than earned income.

For clients with assets, disposals, business interests, or investment portfolios under consideration, this is the most consequential Budget in several years. Act before 28 October, not after.

Capital Gains Tax: The Case for Acting Now

CGT equalisation with income tax rates remains the most widely anticipated measure in the October Budget. If implemented, higher-rate taxpayers could face CGT of 40% on gains from share disposals and investment properties, and 45% for additional-rate taxpayers, compared with the current rates of 18% and 24% respectively. The £3,000 annual exempt amount and the £500 dividend allowance are also under pressure.

To be clear about what is confirmed and what is not: the current CGT rates of 18% and 24% are the rates in place today, following increases introduced in the October 2024 Budget. Business Asset Disposal Relief now carries an 18% rate on qualifying gains up to a £1 million lifetime limit, up from 14% since 6 April 2026. What happens on 28 October remains unconfirmed.

What is clear is that a Budget widely expected to raise CGT rates creates a strong planning argument for acting before the announcement. If a disposal, restructure, or transaction was already under consideration, the timing argument is now significant. Last-minute advice ahead of a Budget rarely produces optimal outcomes. Please get in touch as early as possible if this affects you.

The personal allowance freeze at £12,570, due to end in April 2028, may also be lifted early. Burnham has signalled that rewarding work is a priority, and an early thaw would benefit employed and self-employed individuals whose real-terms tax burden has risen through fiscal drag.

Business Rates Relief for Hospitality: Confirmed from April 2027

On 23 July 2026, the Government confirmed a 20% reduction in business rates for pubs, social clubs, music venues, and independent hospitality, retail, and leisure businesses in England, effective from April 2027. This builds on a 15% relief already in place for 2026/27.

If you operate in one of these sectors, this is a confirmed saving worth factoring into forward planning. Full detail on eligibility and how to claim will be set out in Budget documentation on 28 October. We will update clients then.

National Care Service: Tax Rises Signalled

On 29 July 2026, Prime Minister Burnham announced plans to build a National Care Service, fully integrated with the NHS, with the ambition of lifting social care workers closer to NHS pay standards. A nine-month national conversation on how the service will be funded has begun, with the Casey Commission’s final report due in summer 2027.

Burnham has been explicit that tax rises will likely be needed to fund the reform. No mechanism has been specified, and detailed proposals are not expected before the Budget at the earliest. However, clients with significant personal wealth, property portfolios, or who are approaching retirement-age planning decisions should be aware that this is a live issue with potential medium-term tax implications.

We will report on any Budget announcements in this area as soon as they are made.

Cryptoassets: HMRC Is Now Receiving Your Transaction Data

From 1 January 2026, the UK began applying the OECD’s Crypto-Asset Reporting Framework (CARF), requiring cryptoasset platforms to collect user information and report transaction data directly to HMRC. Platforms must file their first reports with HMRC by 31 May 2027, covering the full 2026 calendar year.

CARF does not create new taxes. Capital Gains Tax and Income Tax have applied to cryptoasset disposals and receipts for years. CARF gives HMRC granular, platform-sourced transaction data that it can automatically cross-reference against Self Assessment returns. From 2027, HMRC will be able to compare what was traded with what was declared.

If you hold or have traded cryptoassets and have not been reporting gains and income through Self Assessment, now is the time to bring your position up to date. HMRC’s cryptoasset guidance sets out what you need to declare and when. Please get in touch if you would like help reviewing your position before the first reports land with HMRC next year.

MTD for Income Tax: Your Second Quarterly Deadline

The second Making Tax Digital quarterly update is due on 7 November 2026, covering the period 6 July to 5 October 2026.

If the August submission went smoothly, the process should now be familiar. If you experienced software issues, incomplete records, or uncertainty about what to include, address these now rather than in late October.

A quarterly update is a summary of business income and expenses submitted through HMRC-compatible software. It is not a tax calculation, and no payment is due at this stage. The Final Declaration, submitted after the year end, is where liability is calculated and confirmed.

The £30,000 income threshold joins MTD from April 2027, and the £20,000 threshold from April 2028. If you are approaching either, the time to set up compliant record-keeping is now, not the month the obligation begins.

Self Assessment: Register by 5 October

If 2025-26 was the first tax year in which you had untaxed income (from self-employment, rental property, savings interest above your personal savings allowance, dividends above £500, or other sources) you must register for Self Assessment with HMRC by 5 October 2026.

This deadline is widely missed because it falls more than two months before the filing deadline, and many first-time filers are unaware of it. Missing the registration deadline is treated as a failure to notify HMRC of a liability and can result in penalties, even if the tax is paid in full and on time.

Once registered, HMRC will issue a Unique Taxpayer Reference within ten working days. The paper return deadline follows on 31 October 2026, with the online return and payment deadline on 31 January 2027.

If you are unsure whether you need to register, please get in touch, and we will confirm your position quickly.

Employment Rights Act 2025: What Changes on 30 October

The Employment Rights Act 2025 has been rolling out in phases since April 2026. The next set of changes takes effect on 30 October 2026.

Tips and gratuities

Employers must now pass on all tips, gratuities, and service charges to workers in full, without deduction. A statutory code of practice governs how tips must be allocated. If your business retains any portion of tips or applies a discretionary process, your policy must be reviewed before 30 October.

Trade union rights

Employers must inform all workers of their right to join a trade union. Updated rules also govern union access to the workplace and facilities for union representatives.

Extended tribunal time limits

The time limit for bringing most employment tribunal claims is extended from three months to six months. This affects all employers regardless of size or sector.

Fire and rehire: an update

Provisions making dismissal for failure to agree to contract changes automatically unfair have been delayed to January 2027. The Acas Code of Practice on dismissal and re-engagement remains in force in the interim, however, and non-compliance carries its own risks.

If you have not yet reviewed your employment contracts and policies in light of the 2025 Act, October is a hard deadline for several of these measures. Please get in touch if you would like guidance on what the changes mean in practice.

Vaping Products Duty: One Month to Go

The Vaping Products Duty takes effect on 1 October 2026 at £2.20 per 10ml of vaping liquid. Businesses not registered and approved by that date cannot legally manufacture, import, or distribute vaping products in the UK.

HMRC warned in July that applications can take upwards of 45 working days to process. If you are in the vaping sector and have not yet applied, the practical deadline has already passed for most businesses. Contact HMRC and your accountant immediately.

A grace period for unstamped existing stock runs to 31 March 2027, when the Vaping Duty Stamps Scheme comes fully into force. This does not extend to new products manufactured or imported after 1 October without duty paid.

What Businesses Should Be Doing Now

Anyone with a disposal, transaction, or restructure under consideration

• Contact Mercian before 28 October: the CGT planning window closes on Budget day
• Do not wait for the announcement; acting after will be significantly harder

Cryptoasset holders

• Review whether gains and income have been correctly reported through Self Assessment
• HMRC will hold platform transaction data from May 2027 and will cross-reference it against returns

MTD-registered sole traders and landlords

• Gather income and expense records for the second quarterly period (6 July to 5 October)
• Deadline: 7 November 2026

First-time Self Assessment filers

• Register by 5 October 2026 if 2025-26 was your first year with untaxed income

Employers

• Review and update tipping and gratuity policies before 30 October
• Inform all workers of their right to join a trade union
• Note extended employment tribunal time limits now in force

Hospitality and leisure businesses

• Note the confirmed 20% business rates reduction from April 2027
• Watch for Budget detail on eligibility on 28 October

Businesses in the vaping sector

• If not yet registered, contact HMRC immediately: the 1 October deadline is not moveable

Did You Know?

The Hearth Tax

From 1662 to 1689, every household in England and Wales was taxed two shillings per year for each fireplace or stove. Because collecting it required tax assessors to enter private homes for inspection, people deeply resented it and widely evaded it. The wealthiest households, with dozens of hearths, paid the most – but the tax also fell on the very poor, and exemptions for those on poor relief were inconsistently applied. Parliament abolished it in 1689, one of the first acts passed after William III took the throne, described at the time as “a badge of slavery upon the whole people.”

The Soap Tax

For over 150 years, from 1712 to 1853, Britain taxed soap. Manufacturers had to hold a licence, lock soap pans after hours to prevent illegal production, and allow excise officers to inspect premises at any time. The soap duty is estimated to have raised the equivalent of around £8 billion in modern terms at its peak. It was credited with discouraging basic hygiene among the working population at a time when soap was not a luxury. Gladstone repealed it in 1853, partly on public health grounds.

Cromwell’s Decimation Tax

In 1655, Oliver Cromwell introduced the Decimation Tax: a 10% levy applied specifically to Royalists and suspected Royalists to fund the militias he had established following the English Civil War. It was one of the first uses of targeted political taxation in British history and proved deeply unpopular even among Cromwell’s own supporters. It was quietly abandoned within two years.

Diary of Main Tax Events – September and October 2026

ATED Returns: Key Submission Deadlines

If you own UK residential property through a company and it falls within the scope of the Annual Tax on Enveloped Dwellings (ATED), it is important to be aware of the deadlines for submitting your return.

Normally, an ATED return must be submitted:

• By 30 April, if the property is within the scope of ATED on 1 April at the start of the chargeable period
• Within 30 days of acquisition, if the property comes within the scope of ATED after 1 April

For newly built properties, the deadline is extended – the return must be submitted within 90 days of the earliest date on which the property either becomes a dwelling for Council Tax purposes or is first occupied.

ATED returns should only be submitted on or after 1 April for the relevant chargeable period. Submitting too early can cause processing issues, while missing deadlines may result in penalties.

If you are unsure whether your property is within the scope of ATED or which deadline applies, get in touch, and we can help you assess your position.

What Comes Next

The Budget on 28 October will define the tax landscape for the year ahead. For clients with assets, investments, or transactions under consideration, the weeks before it are more valuable than the weeks after. We will contact clients individually where we believe specific action is needed. Budget analysis will follow promptly on 28 October itself.

In the meantime, if any of the above is relevant to your position, please do not hesitate to get in touch with the Mercian team.

This newsletter is for general guidance only and does not constitute professional advice. Please contact us to discuss your specific circumstances.

Related posts:

August 2026 Newsletter July 2026 Newsletter March 2026 Newsletter April 2026 Newsletter