In January, the ATT published their top 10 asks for the tax system in 2026, calling on HMRC and the Government to implement practical reforms to improve compliance, reduce error and ease pressure on both taxpayers and professionals.

Rather than calling for new taxes or reliefs, the ATT’s asks focus on fixing processes that are no longer working as intended, and which are increasingly creating confusion, delay and unnecessary contact with HMRC.

Among the key recommendations relevant to employers are: 

• Updating allowances in the tax system. Allowances for business mileage and annual social events for employees have not increased in years, which erodes the value of these allowances for employees. 
• Allowing taxpayers to appoint more than one agent to make sure the right person can help them with their affairs.
• Providing a digital tracking system to allow taxpayers to follow the progress of correspondence and claims through HMRC’s system. Taxpayers also need to be able to communicate electronically with HMRC via a secure online system. 

Uprating allowances: Business mileage 

Approved mileage allowance payments (AMAPs) provide a statutory exemption from tax for payments to employees who carry out business travel in their own vehicles. The standard rate of 45p/mile for the first 10,000 of business miles in an employee’s own car has not increased in 14 years, during which time the cost of running a car has increased substantially.  

Other allowances, including the 24p per mile rate for motorbikes and 20p per mile rate for bicycles, have been unchanged since at least 2001. 

These rates are now so out of date that employees using their own vehicle for work are out of pocket. This particularly affects employees in the care sector, who may have no alternative but to use their own vehicle for work. 

We would like to see a single AMAP rate of at least 50p per mile for all mileage in an employee’s car or van, in order to better capture the additional costs incurred by employees. 

Uprating allowances: Annual parties and other social functions 

The tax exemption for annual parties and other social functions for employees has not changed in over 22 years. Once relatively generous, it now needs to be reviewed to better reflect the current cost of providing such events. 

The existing exemption allows an employer to spend up to £150 per head (including VAT) on the cost of the event and associated travel for an annual staff party. First set in April 2003, employers tell us that this amount is insufficient to cover events, especially in London and other more expensive parts of the country. We think that an increased exemption of at least £200 (including VAT) would better take account of the increase in cost of annual staff functions for employers. 

Improving agent access 

HMRC’s current online services only allow an employer to authorise a single agent to handle their PAYE affairs. While it’s possible to temporarily appoint a different tax adviser to act during a compliance check, there can be instances where employers wish to have multiple agents acting for them, particularly where specialist tax advice is needed. For example, employers may wish to use different agents for payroll, benefits in kind (until mandatory payrolling starts in April 2027) and employment related security returns.

This is not just an issue for payroll but also for corporation tax and VAT. 

We think that HMRC should make it possible for more than one agent to be authorised for each of PAYE, VAT and corporation tax. This would better reflect how employers use professional advisers in practice and reduce the risk of delays and compliance failures.

Digital tracking and secure communication

Our members regularly share their experiences of delays in HMRC correspondence. When HMRC does not action correspondence within a reasonable timeframe, taxpayers are left wondering if their letter has been lost in the post. 

Delays in progressing correspondence lead taxpayers to contact HMRC by phone –which in turn increases the pressure on HMRC’s overstretched phone services. 

Taxpayers increasingly expect to use digital services. A secure online channel to HMRC would allow them to communicate anytime, anywhere, without postal delays or long phone queues. This aligns with modern service expectations and systems that agents and their clients already use – and would allow HMRC to build in tracking mechanisms to enable taxpayers to understand where their affairs are up to. 

This article reflects the position at the date of publication shown above. If you are reading this at a later date you are advised to check that that position has not changed in the time since.   

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