Budget 2026 - ATT reaction

 

 

Autumn Murphy, ATT technical officer, said: "The extension of the VAT cut on domestic electricity will be welcome news for households facing high energy bills. However, as we said when the cut was first announced, we would like to see assurances that the savings will be passed on to households. 

"With the VAT cut remaining a temporary measure, we would also like to see the Government set out a longer-term approach to reforming the VAT system and addressing areas of complexity."

 

 

 

Emma Rawson, director of public policy for the ATT, said: "The new proposal for a specific allowance should ensure that those who receive only the State Pension are not brought into paying income tax.  This had been a real concern due to the interaction of frozen personal allowances and the triple lock, which would have put the new State Pension above the tax-free threshold from next year.

 

"However, the proposed tapering and interaction with other allowances will increase complexity, and it will be important to ensure that HMRC guidance and systems are updated ahead of the change taking effect.

 

"The change will also raise questions about fairness, as young people with small amounts of income above the state pension are still required to pay tax."

 

 

 

Emma Rawson, director of public policy for the ATT, said: "We’re pleased to see that the Government has acted on our call to extend late filing penalty easements to those joining MTD next year. Over 1 million lower income taxpayers are expected to join MTD for the first time in April 2027, many of whom are unrepresented and not currently using software.

 

"An extension of the existing soft landing gives these taxpayers much needed time to get to grips with the complexity of the new regime (or appoint an agent to support them) without having to worry about penalties."

 

 

 

Autumn Murphy, ATT technical officer, said: "We welcome the flexibility for businesses to continue using existing payment methods. However, as set out in our consultation response, we do not believe that mandatory Direct Debit for all businesses is the right approach. Most taxpayers already pay the correct amount of tax on time, we would have preferred to see a more targeted approach to tackling late payment."

 

 

 

Steven Pinhey, ATT technical officer, said: "The challenge is not simply recruiting more compliance officers, but getting them up to speed. Years of lost experience and expertise cannot be replaced overnight by new recruits.

 

"More officers should mean more compliance checks, and taxpayer error remains an important part of the tax gap, but the real question is whether this additional resource will deliver the substantial Exchequer yield forecast, rising from £50 million in 2026-27 to £415 million by 2031-32."

 

 

Autumn Murphy, ATT technical officer, said: We recognise the need to tackle persistent non-engagement and welcome the strengthened safeguards announced following the consultation, including a longer notice period and additional protections around affordability, overdrafts and joint accounts. Appropriate safeguards will be essential to ensuring that the new power operates fairly and does not cause or exacerbate financial hardship.

 

"It will therefore be essential that the new Code of Practice provides robust safeguards and clear protections for taxpayers. We welcome HMRC’s commitment to develop the Code with stakeholders, with a first draft expected in summer 2027, providing further opportunity to engage on the detailed operation of the policy."