On 30 September 2026, HMRC published its Small and Medium-sized Enterprise (SME) Action Plan covering 2025 to 2028, outlining a strategic framework to reduce tax compliance burdens for the UK’s 5.5 million small businesses. The plan responds to the National Audit Office’s 2025 critique of HMRC’s SME engagement and aligns with the Government’s “Growth Mission” to simplify regulatory interactions. Key commitments include expanding the Help to Grow digital adoption scheme, reforming penalty regimes for first-time errors, and embedding SME-specific design principles into Making Tax Digital (MTD) rollouts for Income Tax and Corporation Tax.
Key Takeaways
- Proportional Penalty Framework: HMRC will introduce a “first return error” amnesty for SMEs filing under MTD for Income Tax from April 2027, waiving late filing penalties for genuine mistakes corrected within 30 days, supported by enhanced digital prompts in compliant software.
- Dedicated SME Support Channels: A new “SME Tax Hub” launches January 2027, consolidating webchat, video appointments, and AI-driven guidance for VAT, PAYE, and Corporation Tax queries, targeting 80% first-contact resolution for businesses under £10 million turnover.
- Cash Flow Protection Measures: The plan accelerates VAT repayment processing to 15 working days for SMEs (from 30 days currently) and pilots a “Time to Pay” self-service portal for Corporation Tax liabilities under £50,000, reducing enforcement actions by an estimated 40%.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement