Business Tax Briefing

Andy Burnham MP becomes UK Prime Minister; cost of living measures announced

On 20 July 2026, Andy Burnham MP replaced Sir Keir Starmer MP as UK Prime Minister. In his first speech as Prime Minister, Burnham stated that he would set out measures to help with the cost of living, including how they would be funded. A new 10-year plan for Britain is also to be published later this year.

At the time of writing, tax-related measures announced by Burnham included:

• The zero rate of VAT will apply to supplies of domestic electricity from 1 October 2026. Currently the reduced rate of 5% applies. In the press release, the government states that its expectation is that suppliers will pass the VAT reduction on to their customers, including those on fixed tariffs.
• A 20% reduction to business rates bills is to be introduced for pubs, clubs and live music venues (excluding “the very largest live music venues”) in England from 2027/28. According to the press release, the cut is in addition to the business rates relief for eligible pubs and live music venues in England that was announced in January 2026. The government states that the cut will be funded through measures that include “reviewing reliefs for businesses that do not make a positive contribution to local communities, such as vape shops.”

New Chancellor appointed and other HM Treasury ministerial changes

On 20 July 2026, Prime Minister Andy Burnham MP appointed John Healey MP as the new Chancellor of the Exchequer, replacing Rachel Reeves MP. In his first speech to Treasury staff, Healey outlined his five priorities as Chancellor. His first priority is fiscal discipline, including meeting the government’s fiscal rules, while maintaining a buffer for uncertainty. His other priorities include delivering growth in every postcode, backing Britain, supporting wealth creation, and making life more affordable.

There have been a number of other changes to the Treasury ministerial team. Emma Reynolds MP has replaced Lucy Rigby KC MP as the Chief Secretary to the Treasury. Rigby is now Economic Secretary to the Treasury, replacing Rachel Blake MP. James Murray MP has been appointed Financial Secretary to the Treasury in place of Lord Livermore. Dan Tomlinson MP remains Exchequer Secretary to the Treasury.

Pillar Two: Expiration of HMRC’s ‘transitional approach’ to penalties

In June 2026, HMRC published guidance on the UK’s 'transitional approach' to penalties for businesses within the scope of the UK’s Pillar Two top-up taxes (multinational top-up tax and domestic top-up tax) (see previous Business Tax Briefing). As a reminder, this transitional approach is in place until 31 July 2026. Therefore, late filing penalties will not apply to a return (GloBE Information Return, self-assessment return and/or overseas return notification) that is filed on or before 31 July 2026.

HMRC publish technical consultations relating to financial services sector

HMRC have published two technical consultations of relevance to the financial services sector. On 16 July 2026, HMRC published a consultation on draft regulations that would update certain definitions used in the Bank Levy legislation to align with regulatory changes. The amendments would have effect for chargeable periods beginning on or after 1 January 2027. The consultation closes on 13 August 2026. A separate consultation, published on 20 July 2026, covers reforms intended to improve the quality and consistency of data that HMRC receives on interest income (including bank and building society interest and interest from other sources) and card sales. The measure will come into force on 6 April 2028. The consultation closes on 20 August 2026.

Corporate Criminal Offences statistics updated

HMRC have updated their statistics on investigations of corporate criminal offences (CCO) for the failure to prevent the facilitation of tax evasion. As at 30 June 2026, HMRC had secured one charging decision, with an additional 13 live CCO investigations. A further 27 identified cases were under review as to whether they should proceed to an investigation. The cases identified span 11 business sectors. To date, HMRC have reviewed and rejected an additional 136 cases. However, HMRC note that some of these previous investigations have led to satisfactory explanations that have caused CCO investigations to be dropped but have instead led to other tax and regulatory offences being pursued.