Business News England
Latest Business Updates: VAT, Mileage Rates, Late Payments and AI Guidance
A round-up of key business updates affecting employers, SMEs and organisations across England, including temporary VAT changes, tax-free mileage increases, late payment reforms and new cyber guidance on agentic AI.
Temporary VAT reduction for children’s meals and family attractions
The government has announced a temporary VAT reduction from 20% to 5% for qualifying children’s meals and family leisure activities over the summer period.
The reduced rate is expected to apply between 25 June and 1 September 2026, covering qualifying children’s meals served in restaurants, family tickets for entertainment, and admission to attractions such as museums, zoos, fairs, amusement parks and soft play venues.
Businesses may need to update:
- Pricing and signage
- Tills and payment systems
- Accounts software
- Websites and booking platforms
Tax-free mileage rate rises by 10p per mile
The tax-free mileage rate for cars and vans has increased by 10p per mile for the first 10,000 business miles in a tax year, backdated to April 2026.
For the 2026–27 tax year, the rate is now 55p per mile for the first 10,000 business miles for cars and vans, then 25p per mile thereafter. Motorcycle mileage remains at 24p, and cycle mileage remains at 20p.
Late payment legislation laid before Parliament
Following its mention in the King’s Speech, the Small Business Protections Bill has now been laid before Parliament.
The Bill includes a proposed 60-day cap on payment terms for large businesses paying small suppliers, mandatory interest on late payments, and stronger powers for the Small Business Commissioner to investigate and fine persistent late payers.
Key proposed protections include:
- 60-day payment cap for large businesses paying small suppliers
- Mandatory late payment interest at 8% above Bank of England base rate
- New investigation and enforcement powers
- Greater reporting requirements for large companies
Fit note system set for reform
The government has launched four new pilots to explore how the fit note system can be improved and replaced with more personalised “stay in work” and “return to work” plans.
The pilots will test different approaches, including support from community health workers and conversations between patients, employers and trained professionals around workplace adjustments.
New guidance recommends caution with agentic AI
The National Cyber Security Centre has published guidance on agentic AI, warning organisations to start small and adopt these systems carefully.
Agentic AI systems can plan, make decisions and take actions independently, creating opportunities for efficiency but also increasing cyber, operational and accountability risks.
Visit NCSC Website