In this week’s Enews, we look at the government’s review of mileage rates for business users. There is also a reminder of the ‘contentious’ changes coming into force in the new tax year and information on tax-free Easter childcare to update you on.

• UK government to review mileage rates
• New tax year brings contentious changes
• Save on Easter childcare with Tax-Free Childcare

The government has confirmed it will review approved mileage rates for business users ahead of a future Budget.

The announcement comes after more than a decade without change - despite rising fuel, insurance and maintenance costs leaving many workers covering the gap themselves.

Rachel Reeves, the Chancellor of the Exchequer, highlighted the issue earlier this month, recognising that approved mileage allowance payment rates have not changed since 2011 even as motoring costs have evolved significantly.

The government says the workers-first review will focus on people who rely on their car to do their job, ensuring ‘they are not left out of pocket’. As part of this, the government says it will meet with people struggling with increased costs to inform this review as it develops.

In the meantime, the government says wider action is being taken to support people with the cost of living and keep prices down at the pump, including by freezing fuel duty until September.

Dan Tomlinson, Exchequer Secretary to the Treasury, said:

‘Millions of working people rely on their car to do their job. But mileage rates have been unchanged since 2011 and that’s increased the cost of working. A review is well overdue.

‘Keeping prices down at the pump is an important way we can help people with the cost of living which is why fuel duty is already frozen.’

Internet link: GOV.UK

The start of the new tax year on 6 April 2026 will bring contentious changes with it, warns the Chartered Institute of Taxation (CIOT).

The most controversial change is the taxation of dividends and employee benefits as well as the introduction of Inheritance Tax (IHT) on family businesses and farms.

The government’s Making Tax Digital for Income Tax programme will require most sole traders and landlords with income of more than £50,000 a year to keep digital records and make quarterly submissions to HMRC.

Over the next three tax years HMRC plans to bring 2.9 million self-assessment taxpayers into the programme, requiring them to use compatible software to keep digital records and submit quarterly updates and an annual return.

Most of the changes take effect on Monday 6 April, the start of the new tax year, though a few changes will be in place from Wednesday 1 April.

Ellen Milner, CIOT Director of Public Policy, said:

‘Spring is a time of fresh starts, and for taxpayers it also marks the arrival of a new tax year and new tax rules.

‘The most contentious change being made this April is bringing business and agricultural assets into the scope of IHT, albeit with an additional allowance and being taxed at a lower rate. This will mean many more valuations of estates will be required. Farmers and business owners potentially in scope will need to pay careful attention to their tax planning.’

Internet link: CIOT website

HMRC is urging families to sign up for Tax-Free Childcare before booking their Easter holiday childcare.

More than 542,000 families saved money on their childcare in December, the tax authority says.

Working families who sign up to Tax-Free Childcare can make yearly savings of £2,000 off their childcare costs for each of their children up to the age of 11 and £4,000 for disabled children up to the age of 16.

Once a Tax-Free Childcare account has been opened for each child, for every £8 deposited, the government tops it up by £2. A total of £46.6 million in government cash was added to accounts in December, the latest figures show, contributing to the cost of childcare for almost 660,000 children.

A family can save up to £500 every three months for each child (£1,000 every three months if the child is disabled) which can be used to pay for any approved childcare.

Myrtle Lloyd, HMRC’s Chief Customer Officer, said:

‘£2,000 a year off childcare bills can make a big difference to household expenses. There are plenty of childcare providers to choose from to suit your needs and your children’s interests – sign up today to make those savings for the Easter school holidays and for your plans for the rest of the year. Go to GOV.UK to find out more.’

Internet link: HMRC press release