Following the publication of a summary of the UK Tax Gap, a range of government consultations and responses have been published. A number of these will have significant implications for individuals and small businesses; we have summarised these below.

More timely payments for Income Tax Self Assessment (ITSA) 

The government has published a consultation seeking views on implementing more timely payments in ITSA, including reforms for ITSA customers with Pay as You Earn (PAYE) income who will be required to pay more of their forecasted self assessment liabilities in-year through PAYE from April 2029. 

The government is also consulting on the potential for more timely payments for other self assessment taxpayers by reforming Payments on Account. Spreading tax payments through the year into smaller, regular payments will help reduce tax debt and avoid taxpayers having to pay larger, infrequent and sometimes unexpected bills. 

Call for evidence on PAYE Settlement Agreements (PSAs)

The government has published a call for evidence on PSAs seeking to improve understanding of how PSAs operate in practice, including how employers interpret the rules and where there may be complexity or uncertainty. The evidence gathered will allow an informed view of whether any changes are needed, with the aim of addressing unclear boundaries and inconsistent use and helping to reduce administrative burdens for employers and advisers. 

Consultation on modernising the distributions framework

The government has published a consultation to explore modernising the rules that determine whether a payment to a company’s non-corporate shareholders falls within the distributions’ regime. This is to ensure the rules operate as intended and minimise distortions, without undermining commercial practice.

The government is consulting because of the complexity of this area of the tax system, which in many cases has not been reformed since 1965, and the need to have a clear view of potential impacts before deciding whether to proceed.

Call for evidence on voluntary National Insurance contributions 

The government has published a call for evidence on voluntary National Insurance contributions to better understand how the system operates in practice and where improvements could be made. The evidence gathered through this process will help to inform the government’s wider thinking around voluntary National Insurance contributions and any future decisions about administrative and policy reform.

Consultation on the tax treatment of members of US Limited Liability Companies and other reverse hybrids 

The government published a consultation in June on new proposals to remove double taxation from investments in certain types of overseas entity (including US Limited Liability Companies) which can result in effective tax rates above 75%. This proposal addresses an unintended mismatch resulting in high and unfair tax rates and is part of the wider government work to develop the UK’s offer for globally mobile talent. 

First-time buyer Individual Savings Account (ISA) consultation 

As announced at Budget 2025, the government has published a consultation on the implementation of a new, simpler ISA product to support first-time buyers of a home. The consultation sets out the policy design of the new product and seeks views on technical elements, such as ISA manager requirements and how the product should interact with other ISA types.

Once available, this new product will be offered in place of the Lifetime ISA. However, it will remain possible to open a Lifetime ISA until the new product becomes available and for account holders to continue to save into their Lifetime ISA in line with the existing rules indefinitely. 

Consultation on removing National Insurance contributions debt from the scope of the Limitation Act 1980 and aligning processes with other forms of taxation 

The government will consult on proposals to remove National Insurance contributions debt from the scope of the Limitation Act 1980 and to align National Insurance contributions recovery processes more closely with other forms of taxation.

The changes will simplify the tax system by ensuring greater consistency in how debts are treated across taxes, reducing complexity and administrative costs associated with current recovery processes. The consultation, expected in summer 2026, will seek views on how best to modernise and streamline those arrangements whilst maintaining appropriate safeguards.

Call for evidence on customs modernisation 

The government has published a call for evidence to capture industry views on trade digitalisation and the opportunities and challenges this poses for the future of the UK customs regime. This will explore key elements of the UK customs regime in the context of technological and regulatory change, to ensure HMRC continue to understand evolving trade practices and needs to enable the best support for international trade into and out of the UK.

Online marketplace liability 

The government has published a consultation seeking views on the proposed extension of the VAT online marketplace liability rules to UK based businesses. The proposed reforms intend to tackle VAT non-compliance from overseas and UK based businesses which can distort competition and place compliant businesses, both online and on the high street, at a disadvantage. The government intends to minimise the impact on genuine UK businesses not required to pay VAT.

Electronic Sales Suppression Software Standards (ESS) 

The government has published a consultation on the introduction of software standards for the Electronic and Mobile Point of Sale (EPOS/MPOS) sector to explore how best to embed standards across the latest products and innovations. This consultation seeks views from businesses, software developers and wider stakeholders on measures designed to prevent electronic sales suppression and support fair competition on the high street. 

The government aims to ensure any future approach minimises burdens on compliant businesses, and believes that strengthened controls, such as modern encryption and record standardisation in the EPOS sector, have the potential to dramatically reduce the incidence of ESS or ‘till fraud’. 

Tackling lower value debts

The government has published a consultation seeking views on proposals to extend existing powers to enable recovery of lower value tax debts. This would apply to customers who can pay but have not responded to multiple contact attempts from HMRC. Each year, over 750,000 such debts, collectively worth more than £2bn, remain uncollected after nine months and more than ten attempts to contact customers to pay what they owe.

The proposals would enable HMRC to collect debts directly from customers’ accounts in regular instalments, supported by a comprehensive suite of safeguards to ensure the power is used fairly and proportionately. This measure will help ensure those who can pay their tax debt do so, while maintaining trust and fairness in the tax system.

Requiring payment of VAT and PAYE by Direct Debit 

At Budget 2025, the government announced its intention to consult on making Direct Debit the mandatory payment method for VAT and PAYE return liabilities, subject to defined exceptions. The consultation has now been published and will also consider whether any enforcement arrangements or incentives would be appropriate. 

Introducing a criminal offence for making reckless untrue statements or declarations in direct tax 

The government has published a consultation on the introduction of a criminal offence of reckless untrue declarations or reckless false statements for direct tax matters, aligning the legal framework with existing offences in indirect tax. The aim is to ensure consistency across tax regimes, to ensure that those who engage in highly culpable serious non-compliance are fairly tried and properly brought to justice.

Land Remediation Relief 

The government has published a summary of responses to the consultation on Land Remediation Relief, which closed in September 2025. This provides stakeholders with an update on the evidence gathered, the government’s assessment of the relief’s effectiveness and next steps. The publication offers greater clarity to businesses and sets out how the government is approaching reforming the relief, and the intention for further engagement with the construction and land remediation sectors.

Next steps

ACCA will be responding to some of the consultations in full and may be able to provide a partial response on some of these with limited impact on members and their clients.

Members wishing to provide any feedback, comments or insights on any of the consultations should contact ukpolicy@accaglobal.com.