Chancellor's Surprise Statement: Key Tax Changes You Should Know About

In an unexpected move, Chancellor Rachel Reeves made a surprise statement to Parliament, announcing a series of targeted tax measures. The announcements cover several sectors – whether you're a business owner, employer, or one of those directly affected, there is plenty here of relevance. Here's a brief summary of the headlines.

Good news for drivers and hauliers

The mileage rate for tax-free reimbursements is increasing from 45p to 55p per mile, backdated to April 2026. If you reimburse employees for business travel, it's worth reviewing your existing arrangements.

HGV operators will benefit from a 12-month road tax holiday, providing some short-term relief on operating costs.

Relief for farmers

Duty on red diesel is being cut by a third for the remainder of the year, offering some breathing room on day-to-day costs.

Hospitality and leisure: a VAT reprieve over summer

VAT on admission to summer attractions – such as museums, zoos and theme parks – is being reduced to 5% over the school holidays. This will also apply to children’s tickets for cinemas, soft play and the theatre.

Children's meals in restaurants and cafes will also benefit from the reduced rate between 25 June and 1 September 2026. If you operate in this sector, there are potential implications for your pricing and adjustments to how your VAT returns are prepared during that period.

Energy sector

New rules are proposed for foreign branches relating to UK energy profits. The detail is still emerging, but this could affect smaller businesses connected to the energy sector –we'll be keeping a close eye on the guidance as it develops.

More detail on each of these areas will follow over the coming days as further information becomes available. In the meantime, if you'd like to discuss how any of these changes might affect you or your business, please don't hesitate to get in touch.