The energy price cap increases, and how the ONS collects statistics
Bad news for homeowners as the cost of the energy price cap increases by 4%, and we explain how the ONS collects statistics.
Energy prices set to rise
Energy regulator Ofgem has announced a 4% increase in the energy price cap for the period covering 1 October to 31 December 2026. This increase reflects higher wholesale gas prices due to the ongoing conflict in the Middle East, with volatile global gas markets remaining the dominant driver of price changes.
This includes the government’s removal of VAT from all domestic electricity bills.
While this price cap increase does not directly affect businesses, as the cap applies only to domestic customers, the indirect effect of rising wholesale energy prices is likely to push the costs of commercial contracts upwards.
The energy price cap protects around 22 million households on default tariffs by limiting the maximum rates and standing charges that energy suppliers can charge. It is updated every three months to reflect changes in the underlying costs of supplying energy.
Prepare to be signed up for MTD
Last week, HMRC confirmed that, from September 2026, they will sign up taxpayers who are required to use Making Tax Digital (MTD) for Income Tax for 2026-27, but who have not yet registered for the service themselves. They have now published guidance setting out the steps affected individuals should take.
HMRC will automatically sign up taxpayers if their records show qualifying income exceeded £50,000 in the 2024-25 tax year and they have not yet registered.
For taxpayers whose level of income means that they are not required to join MTD until 2027-28 or 2028-29, there is no change. It is only taxpayers who were required to sign up to MTD for 2026-27 that will be automatically signed up by HMRC.
What happens if HMRC automatically signs you up?
HMRC will contact you directly, either by post or digitally depending on your contact preferences, asking you to complete a ‘checking step’.
You can complete this checking step yourself, or you can ask us as your agent to do it for you. Because HMRC will not write to us to say that they have signed you up, you will need to let us know if you would like us to help you.
If you would like to complete the checking step yourself, it can be carried out in the ‘Making Tax Digital for Income Tax’ section of your HMRC online services account; this will be your Personal Tax Account or Business Tax Account. If you have never used an HMRC online services account, you will need to set up an account.
The ‘checking step’ will involve verifying the information HMRC holds on your business and property income. It is important to remember that HMRC’s information derives from historical data for 2024-25. This means it is possible that HMRC could include details for businesses that have ceased.
If your business has ceased, you do not need to use MTD and HMRC will confirm this once they have been contacted.
Once joined, you will need to use compatible software to catch up and create digital records from the start of the tax year. Any overdue quarterly updates will need to be submitted as soon as possible (the first quarterly submission was due on 7 August 2026).
HMRC have confirmed there will be no penalty points for missing a quarterly update for 2026-27. A final quarterly update will be required before the 2026-27 tax return can be submitted, and penalties will be charged if the tax return is submitted late.
If you have been signed up and are not sure why or need any other help with MTD, please contact us. We’d be happy to help you!
How the ONS Collects Statistics
Tougher social changes have affected the reliability of some labour productivity statistics gathered by the Office for National Statistics (ONS) and the organisation has come under increased scrutiny.
The ONS collects information from a wide range of sources to produce official measures of the UK economy, labour market and living standards. These include household and business surveys, employer returns and administrative data held by government departments such as HMRC.
With a reputation for being the ‘gold standard’ for national statistics, the criticism of the reliability of labour productivity, which looks at how much is produced for each hour worked across the economy, has stung.
It’s a criticism that Richard Heys, Deputy Chief Economist at the ONS, accepts but explains.
Traditionally, many key economic indicators have relied on surveys.
For example, labour productivity, a measure of how much output is produced for each hour worked, was historically calculated using UK Gross Value Added (GVA) alongside hours worked data from the Labour Force Survey (LFS).
But there have been declining response rates to the LFS in recent years that has made some employment and productivity estimates less reliable, prompting the ONS to review its methods.
To strengthen its statistics, the ONS increasingly combines survey findings with administrative records.
Since 2024, it has published an experimental productivity measure based on HMRC payroll data collected through the Real-Time Information (RTI) system, supplemented with data on self-employment and working hours. The organisation is now developing a new ‘components’ approach that draws together information from several sources, including RTI, the Labour Force Survey and the Workforce Jobs survey completed by employers.
Alongside these methodological changes, the ONS is introducing technology to improve efficiency and data quality. Artificial intelligence is being used to classify occupations and industries from survey responses, reducing manual processing and improving accuracy. The agency also plans to automate the extraction of spending information from household receipts collected through the Living Costs and Food Survey.
These developments come as the ONS works to address long-standing issues with labour market statistics, update measures such as GDP, develop a new business register and prepare for the 2031 Census. While additional funding has been allocated for census preparations, tight budgets mean the organisation is focusing resources on its core economic statistics and seeking more efficient ways to gather and process data.
The ONS’s current direction reflects a broader shift away from relying solely on surveys towards combining multiple sources of information. This approach is designed to improve the reliability of official statistics while reducing costs and responding to the challenges of falling survey participation.