Higher energy prices due to the conflict in the Middle East are set to make the median working-age British household £480 worse off this year, according to the Resolution Foundation.

The think tank based its estimates on market-forecasts for the rise in energy prices consistent with market pricing after the announcement of a ceasefire.

For families with above average income, rising energy prices will likely tip living standards growth into negative territory, says the Foundation.

The typical household, previously on track for 0.9% growth, is now set to see its income fall by 0.6% – a difference of £480 – over the course of the current financial year.

It says that average income growth for the poorest fifth this year is now set to be just 1.2%, down from 2.8% before the conflict.

James Smith, Chief Economist at the Resolution Foundation, said:

‘Despite hopes for a sustained peace, the path of this conflict remains uncertain and energy prices remain well above pre-war levels, meaning many households face a decline in their purchasing power this year.

‘This squeeze will run right through the income distribution. Lower-income households will still see some income growth thanks to a long-awaited rise in real benefit levels, but inflation will likely knock more than a percentage point off what they stood to gain.

‘For those in the middle and towards the top of the income distribution, even the thin growth they had been expecting has tipped into negative territory.’

There is less than a year to go before all employers must tax benefits-in-kind via the payroll, the Chartered Institute of Taxation has warned.

Benefits-in-kind are non-cash benefits provided by employers to employees or directors. Common benefits include company cars, private medical insurance and gym membership.

While the benefit is paid for by the employer the recipient is required to pay Income Tax and potentially National Insurance contributions (NICs) on the value of the benefit, as if this value had been added to their salary.

Additionally, the employer must pay employer NICs on the value of the benefit. According to HMRC more than 3.5 million employees receive a taxable benefit-in-kind.

Currently, most employers compute the value of a taxable benefit after the end of the tax year and report it on a P11D form to HMRC and the employee. This means the employer potentially has up to 15 months to calculate, verify and report the value of a benefit.

From 6 April 2027 it will be a legal requirement to report and pay Income Tax and NICs on most benefits-in-kind and taxable expenses payments via payroll rather than waiting until the end of the tax year.

Sarah Hewson, Vice-Chair of the CIOT’s Employment Taxes Committee, said:

‘Mandatory payrolling of benefits will have a big impact on employers, employees and software providers. Don’t leave it too late to get ready for this change.’

Internet link: CIOT

The government has confirmed it will review approved mileage rates for business users ahead of a future Budget.

The announcement comes after more than a decade without change – despite rising fuel, insurance and maintenance costs leaving many workers covering the gap themselves.

Rachel Reeves, the Chancellor of the Exchequer, highlighted the issue earlier this month, recognising that approved mileage allowance payment rates have not changed since 2011 even as motoring costs have evolved significantly.

The government says the workers-first review will focus on people who rely on their car to do their job, ensuring ‘they are not left out of pocket’. As part of this, the government says it will meet with people struggling with increased costs to inform this review as it develops.

In the meantime, the government says wider action is being taken to support people with the cost of living and keep prices down at the pump, including by freezing fuel duty until September.

Dan Tomlinson, Exchequer Secretary to the Treasury, said:

‘Millions of working people rely on their car to do their job. But mileage rates have been unchanged since 2011 and that’s increased the cost of working. A review is well overdue.

‘Keeping prices down at the pump is an important way we can help people with the cost of living which is why fuel duty is already frozen.’

Internet link: GOV.UK

Vaping-related businesses and supply chains need to register now for Vaping Products Duty (VPD) and the Vaping Duty Stamps (VDS) Scheme, says HMRC.

Businesses need to provide the required information now to register for HMRC approval and begin the process of applying for duty stamps.

From 1 October 2026, this information will be used to determine when duty becomes payable, making registering now an essential step in early preparation.

Businesses can visit GOV.UK and search for ‘vaping duty’ to access guidance. It explains which vaping products are liable to the new excise duty, the key dates and milestones ahead, and the roles and responsibilities of manufacturers, importers, warehousekeepers and other businesses across the supply chain.

It also sets out how and when businesses need to register and apply for the relevant approvals, which will take at least 45 working days if further information is needed.

Rachel Nixon, HMRC’s Director of Indirect Tax, said:

‘From 1 April 2026, UK vape manufacturers, importers and warehousekeepers can apply to HMRC for VPD and VDS Scheme approval, which is essential for these businesses to continue trading legally from 1 October.

‘Our guidance brings all the key information together, and using it now will help firms prepare properly, avoid errors and ensure they can continue trading when the new requirements apply from October.’

Internet link: HMRC press release

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