With autumn now well underway, October brings with it a number of important tax and payroll developments that businesses and individuals should be aware of. In this month’s newsletter, we look at HMRC’s plans to issue around 1.8 million Simple Assessment letters for the 2025-26 tax year and explain what recipients should do when their letter arrives. We also consider the potential PAYE and National Insurance obligations for UK employers with employees who normally work overseas but come to the UK to carry out their duties.

For businesses and self-employed individuals who have experienced a difficult trading period, we look at how trading losses may be used to reduce tax liabilities and, in some circumstances, generate a tax refund. We also highlight HMRC’s new online Self Assessment registration service, which aims to make the registration process quicker and easier for those who need to submit a tax return for the first time.

With a number of important filing and payment deadlines approaching over the next couple of months, our Tax Diary provides a useful checklist to help ensure nothing is overlooked. We hope you find this month’s newsletter both informative and helpful.

HMRC sending 1.8m Simple Assessment letters

Some taxpayers have already started to receive Simple Assessment letters from HMRC for the 2025-26 tax year, with a further tranche due to be sent between October and December 2026.

Simple Assessment is used where HMRC cannot collect income tax through PAYE or self-assessment. The PA302 letter sets out HMRC’s calculation of the tax due, based on information it holds. Common examples include tax due on pension income, savings interest, dividends or if the taxpayer has a second source of income that has not been taxed. It can also apply where someone has received more tax-free allowance than they were entitled to, or where the amount owed cannot be collected through a tax code, typically £3,000 or more.

HMRC began sending letters to working-age taxpayers from 30 June 2026, followed by letters to pensioners from 12 August. A second tranche, relating to bank and building society interest (BBSI) data, is expected to be issued between October and December 2026. In some limited cases, taxpayers may receive more than one letter for 2025-26.

Tax can be paid in full or by instalments, with the deadline depending on when the Simple Assessment letter is received. For the 2025-26 tax year, letters received before 31 October 2026 require payment by 31 January 2027. Letters received on or after 31 October 2026 require payment within three months of the date of the letter. 

HMRC expects to issue around 1.8 million Simple Assessment letters for the year. Taxpayers receiving a letter should check the calculation carefully against their own records and contact HMRC if they believe any information is incorrect or the assessment should be withdrawn. 

If you receive a Simple Assessment letter and are unsure whether the calculation is correct, what you need to pay or what action you should take, please contact us. We can review the assessment and help you understand what it means and how to deal with it.

UK employers with overseas employees

UK employers with employees who normally work overseas may have PAYE and National Insurance obligations when those employees come to the UK to carry out their duties in the UK on a short-term basis.

Employers should consider the position whenever an overseas employee visits the UK to work. The fact that the employee remains employed and paid by an overseas company does not, by itself, mean that there is no UK PAYE obligation. In some circumstances, the UK company hosting the employee may be responsible for operating PAYE.

There are arrangements that can help employers with the normal PAYE requirements for qualifying short-term business visitors. For example, an EP Appendix 4 arrangement may allow a UK host employer not to operate PAYE where the relevant conditions are met, including where a double taxation agreement applies and no UK Income Tax liability ultimately arises. National Insurance needs to be considered separately, as an Appendix 4 arrangement does not cover NICs.

Where PAYE is required but it is impractical to operate it in the normal way, an EP Appendix 8 arrangement may be available for certain short-term business visitors. This allows the employer to report and pay the relevant tax after the end of the tax year, subject to the conditions of the arrangement.

If you have overseas staff working in the UK, we can help you make sure your payroll processes are correct.

When can a trading loss generate a tax refund

Making a trading loss whilst not ideal can sometimes generate a tax refund. If you are a self-employed individual or a member of a trading partnerships, a trading loss can potentially be set against other income or capital gains. This can reduce the amount of tax payable and, where tax has already been paid, may result in a refund.

For the 2025-26 tax year that ended in April, a loss can generally be set against income for the same year or the previous tax year. This means a business that made a profit in an earlier year but has subsequently made a loss may be able to recover some of the tax previously paid.

There are restrictions. For example, the trade must generally be carried on commercially and for profit, rather than as a hobby. Other restrictions can apply depending on the circumstances, including where the individual works fewer than 10 hours a week on the commercial activities of the trade.

There is also a limit on the amount of certain Income Tax reliefs that can be claimed against total income. The limit is generally the higher of £50,000 or 25% of adjusted total income.

A loss can also usually be carried forward and used against future profits from the same trade.

If you have a trading loss, it may provide an opportunity to reduce an earlier tax bill, generate a refund or reduce tax on future profits. The rules can be complex, and we are happy to help advice you on the best way forward.

New self-assessment registration service launched

HMRC has launched an improved online service to make it easier for individuals to register for self-assessment. Anyone who needs to submit a tax return for the first time for the 2025-26 tax year should notify HMRC by 5 October 2026 to avoid a potential penalty.

The new service is available through a Personal Tax Account and includes pre-populated information, online support during registration and the ability to save and return without losing information. Taxpayers will also receive confirmation by email or text when their registration is complete.

Once registered, taxpayers receive a Unique Taxpayer Reference (UTR), which is needed to complete their tax return. Under the new service, the UTR should appear in the taxpayer's online account within 72 hours, instead of taking up to 15 days to arrive by post.

Taxpayers who are unsure whether they need to submit a tax return can use HMRC's online checking tool. Those who need to register may include newly self-employed individuals with gross trading income above £1,000, a new partner in a business partnership and taxpayers with more than £2,500 of untaxed income.
The deadline for submitting the 2025-26 self-assessment tax return and paying any tax due is 31 January 2027.

Anyone who no longer needs to complete a tax return should tell HMRC as soon as possible.

Until HMRC confirms that a self-assessment return is no longer required, taxpayers should continue to meet their self-assessment filing obligations.

The new registration service is currently available to individual taxpayers with a Personal Tax Account. Agents must continue to use the existing registration processes, including using forms CWF1 or an SA1, to register.

Tax diary: October and November 2026

1 October 2026 - Corporation Tax payment is due for companies with an accounting period ending 31 December 2025, unless the company is required to make quarterly instalment payments.

5 October 2026 - Deadline for notifying HMRC of a new liability to Income Tax or Capital Gains Tax for the 2025-26 tax year. This may include registering for Self Assessment if you became self-employed, started receiving taxable rental income or received other income or gains that have not already been taxed.

7 October 2026 - VAT returns and payments are normally due for accounting periods ending 31 August 2026, unless a different deadline applies. Businesses paying by Direct Debit should allow sufficient time for HMRC to collect the payment.

19 October 2026 - PAYE, employee and employer National Insurance contributions, student loan deductions and Construction Industry Scheme deductions are due for the month ended 5 October 2026 if payment is made by post.

19 October 2026 - Deadline for submitting the CIS300 monthly return for the month ended 5 October 2026.

22 October 2026 - Electronic payments of PAYE, National Insurance contributions, student loan deductions and CIS deductions are due for the month ended 5 October 2026.

22 October 2026 - Electronic payment deadline for tax and Class 1B National Insurance contributions due under a PAYE Settlement Agreement for the 2025-26 tax year. The deadline is 19 October 2026 if payment is not made electronically.

31 October 2026 - Deadline for submitting a paper Self Assessment tax return for the year ended 5 April 2026. Taxpayers who miss the paper filing deadline can normally file online by 31 January 2027 instead.

31 October 2026 - Corporation Tax returns are due for companies with an accounting period ending 31 October 2025.

31 October 2026 - Companies House accounts are due for private companies with an accounting period ending 31 January 2026. Different deadlines apply to a company’s first accounts.

31 October 2026 - Plastic Packaging Tax returns and payments are due for the quarter ended 30 September 2026 where the business is registered for the tax.

1 November 2026 - Corporation Tax payment is due for companies with an accounting period ending 31 January 2026, unless the company is required to make quarterly instalment payments.

7 November 2026 - VAT returns and payments are normally due for accounting periods ending 30 September 2026, unless a different deadline applies. Businesses paying by Direct Debit should allow sufficient time for HMRC to collect the payment.

19 November 2026 - PAYE, employee and employer National Insurance contributions, student loan deductions and Construction Industry Scheme deductions are due for the month ended 5 November 2026 if payment is made by post.

19 November 2026 - Deadline for submitting the CIS300 monthly return for the month ended 5 November 2026.

22 November 2026 - Electronic payments of PAYE, National Insurance contributions, student loan deductions and CIS deductions are due for the month ended 5 November 2026. As 22 November 2026 falls on a Sunday, businesses should arrange payment early enough for the cleared funds to reach HMRC by the deadline.

30 November 2026 - Corporation Tax returns are due for companies with an accounting period ending 30 November 2025.

30 November 2026 - Companies House accounts are due for private companies with an accounting period ending 28 February 2026. Different deadlines apply to a company’s first accounts.