Accounting Tax News November 2025

Welcome to the November tax update. We hope you find it useful. Feel free to contact us if you wish to discuss anything further accounts@cubeaccounting.co.uk 01788 815017.

We hope that you find this informative. Please contact us if you wish to discuss any matters in more detail.

MAKING TAX DIGITAL: ADVICE FOR DIGITALLY EXCLUDED TAXPAYERS

HMRC has published long-awaited guidance on how digitally excluded individuals should apply for an exemption from Making Tax Digital (MTD) for Income Tax. Gaining HMRC’s agreement that a person is digitally excluded is essential.

WHAT DOES ‘DIGITALLY EXCLUDED’ MEAN?

The MTD legislation defines digitally excluded individuals as those who are unable to use electronic communications or keep electronic records due to their religion, age, disability, location, or any other reason. Unfortunately, HMRC’s guidance does not tell us how they intend to interpret the legislation, although they say they will not accept applications for an exemption if the only reason for applying is one of the following: 

• The individual previously filed a paper return. 

• The individual is unfamiliar with accountancy software. 

• The individual has a small number of digital records to create each tax year. 

• It will take extra time or cost for the individual to sign up for and use MTD for Income Tax.

APPLYING FOR EXEMPTION DUE TO DIGITALLY EXCLUDED STATUS

To apply for digital exclusion, you or your representative should either call HMRC’s self-assessment general enquiries line (0300 200 3310) or write to:

Self Assessment HM Revenue and Customs BX9 1AS United Kingdom.

If you would like a friend or family member to call/write on your behalf, you should authorise them to do so, either over the phone or by writing to HMRC.

The application should include the following information:

• Your name, address and National Insurance number.

• Details of how you currently submit your tax return (including if someone else helps you do this). 

• The reason you think you are digitally excluded. This should include any additional information to support the claim. 

• Whether you have an agent (for example, an accountant) and what they will do for you. 

• Any additional needs you have, so that HMRC can provide the right support.

Written applications should use the following title: ‘Making Tax Digital for Income Tax - digitally excluded application’

HMRC should respond within 28 days. If HMRC disagree that you are digitally excluded, you can appeal, in writing, to the address provided in the decision letter.

INDIVIDUALS ALREADY EXCLUDED FROM MTD FOR VAT

If you are already digitally excluded for MTD for VAT purposes, you should contact HMRC by phone or in writing, using the contact details provided above. Provided your circumstances have not changed, HMRC will agree that you are exempt from MTD for Income Tax. HMRC will need the following information:

• Your National Insurance number. 

• Your VAT registration number. 

• The reason you are digitally excluded from sending VAT returns using MTD compatible software, and if your circumstances have changed.

For more information please get in touch with us – we can discuss your situation and help you plan your approach to MTD for Income Tax.

VAT: WHEN IS A BISCUIT ‘CHOCOLATE COVERED’?

In a recent First Tier Tribunal (FTT) case, Ferrero Ltd v HMRC, the FTT found that Nutella Biscuits are zero-rated for VAT.

VAT legislation provides that biscuits are zero-rated unless they are wholly or partly covered in chocolate or a substance that is similar to chocolate. HMRC argued that the Nutella Biscuits should be standard-rated on the basis that they were covered in a chocolatey substance.

Nutella Biscuits are constructed in layers, with Nutella filling and a ring made of a chocolate-like substance sitting within two baked biscuit elements that represent the outer surface of the product.

The FTT agreed that the chocolatey ring was visible between the two baked biscuit elements, but it did not form part of the outer surface of the biscuit so it could not be considered ‘covering’.

As such, the FTT found that the biscuits were not covered in anything and could therefore be zero-rated.

If you start selling a new food product, it’s important to consider its VAT rating, as mistakes can be costly. As demonstrated in the Nutella Biscuit case, the legislation is complex, so please get in touch with us if you need advice.

ADVISORY FUEL RATES: ELECTRIC CAR CHARGING

In the previous edition of this newsletter we showed HMRC’s Advisory Fuel Rates (AFRs) applicable from 1 September 2025. You may have noticed that there was a new rate for fully electric vehicles that are charged using public charging facilities. This means that we now have two electric car rates, which from 1 September are as follows:

Where vehicle charged at home:                                8p per mile

Where vehicle charged using public chargers:          14p per mile

Updated quarterly, AFRs assist employers in reimbursing employees for fuel costs incurred during business travel in company cars. They’re also used to calculate the VAT element of business fuel. Additionally, employees may use these rates to repay their employer for the cost of any private fuel usage.

The following updates have been made to HMRC’s AFR guidance:

• If the cost per mile of a public charger exceeds the AFR, employers or employees may use a higher rate, provided they can show the cost per mile was higher.

• For journeys where a company car is charged at both public and residential locations, you may apportion the mileage to reflect the proportion of charging at each location.

  • Any apportionment should be carried out on a fair and reasonable basis.

DIARY OF MAIN TAX EVENTS

NOVEMBER / DECEMBER 2025

Date	What’s Due
1 November	Corporation Tax for year to 31/01/2025, unless quarterly instalments apply
19 November	PAYE & NIC deductions, and CIS return and tax, for month to 05/11/2025 (due 22/11 if you pay electronically)
1 December	Corporation Tax for year to 28/02/2025, unless quarterly instalments apply
19 December	PAYE & NIC deductions, and CIS return and tax, for month to 05/12/2025 (due 22/12 if you pay electronically)
30 December	Deadline for filing 2024/25 tax return online if you wish to request that HMRC collect outstanding tax via your PAYE tax code.

If you have any question or queries about how any of the above will effect your business, get in touch.

The team are always happy to help email us on accounts@cubeaccounting.co.uk or call 01788 815017.