Legal News

In this issue: Budgets and Finance Bills Taxes management and litigation Business structures Anti-avoidance Employment taxes Devolution International Individuals and income tax Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Budgets and Finance Bills National Insurance Contributions ( Employer Pensions Contributions) Bill in the House of Lords The National Insurance Contributions ( Employer Pensions Contributions) Bill has passed through the House of Commons and is now being scrutinised by the House of Lords. See: LNB News 23/01/2026 8. Further changes to Finance Bill 2026; Public Bill Committee timetable On 23 January 2026, the UK government introduced additional amendments to Finance Bill 2026 ( FB 2026) for the Public Bill Committee to examine: clause 13 (enterprise management incentives) and clause 225 (tax adviser...

Delphi Derivatives Ltd (in liquidation) v HMRC [2026] UKUT 21 ( TCC) The company participated in an employee benefit trust ( EBT) arrangement known as the Clavis scheme, designed to obtain immediate corporation tax relief for sums paid into the trust whilst delivering income tax-free benefits to its directors. Contributions were made in 2008 and 2009, with no PAYE or National Insurance accounted for. Prior to joining the arrangement, the company asked its own accountants to review it. That review advised seeking a separate opinion from tax counsel; nonetheless, the company chose to proceed without taking counsel’s advice. It was common ground that the planning failed, yet the company challenged HMRC’s penalties arising from inaccuracies in its P35 returns for 2008–09 and 2009–10. The first penalty proceeded on the footing of a careless error, and the second on the footing of a...

HMRC v Med Pro Healthcare Ltd and others [2026] EWCA Civ 14 The Court of Appeal faced a single issue: to what extent may the UT lay down guidance for the FTT’s exercise of discretion when considering whether to admit late appeals. In Medpro ( Medpro Healthcare Ltd [2025] UKUT 255 ( TCC)), the UT questioned the stance taken by the UT in Martland ( Martland [2018] UKUT 178 ( TCC)) and Katib ( Katib [2019] UKUT 189 ( TCC)), which had set out general principles for the FTT to follow. It also challenged the particular emphasis those decisions placed, at the stage three “in all the circumstances” assessment described in Martland, on the need for litigation to proceed efficiently, at proportionate cost, and for statutory deadlines to be observed. This was raised against the background that Medpro concerned a VAT appeal governed by...

Background and consultation On 26 March 2025, the government opened a consultation to shape a new service intended to give major investment projects in the UK greater certainty over their tax outcomes. It was viewed as a pragmatic, pro-business initiative, aligned with the wider objective of nurturing long-term economic growth and promoting the UK as a prime location for large-scale capital deployment. At Budget 2025, the authorities released a summary of responses, together with draft legislation and accompanying guidance. Those draft measures appeared in the Finance Bill ( Finance Bill 2026, clauses 263-271 (as introduced)), and draft technical guidance was subsequently issued on 10 December 2025. The tone of the official response is positive, reflecting that a number of material points raised during engagement have been accepted. The government will also keep specific elements of the service under review for a 12-month period,...

Holden v HMRC; and HMRC v The Boston Consulting Group UK LLP and Others [2026] UKUT 25 ( TCC) The appeals related to arrangements introduced by The Boston Consulting Group from 2011, under which senior individuals (managing directors and partners, or MDPs) received so‑called ‘capital interests’ in The Boston Consulting Group UK LLP (the LLP). On retirement and other specified trigger events, those interests had to be transferred to the corporate member, BCG Ltd, for consideration determined by the uplift in the value of shares in the US parent, BCG Inc. The LLP and the MDPs reported the sums arising as chargeable gains and claimed entrepreneurs’ relief. The FTT concluded that the capital interests did not amount to interests in the LLP’s capital and that the amounts paid were properly characterised as income......

In this issue: Budgets and Finance Bills Share and asset sales VAT International Stamp and transfer taxes Taxes management and litigation Energy and environment Key developments Daily and weekly news alerts New and updated content Dates for your diary Trackers Latest Q& A Useful information Budgets and Finance Bills Welsh government publishes Budget for 2026/27 On 20 January 2026, the Welsh government issued its final Budget for 2026/27. It sets out tax measures, including retaining the current Welsh income tax rates, making no changes to existing land transaction tax rates, and introducing new landfill disposals tax rates from 1 April 2026. The Senedd will debate and vote on the final Budget on 27 January 2026. See: LNB News 21/01/2026 14......

Nimbus: The Disability Consultancy Service Limited v HMRC [2026] UKFTT 38 ( TC) The Appellant created and rolled out an ‘ Access Card’ to assist disabled people in communicating their access needs to venues and service providers, and to act as recognised proof of those needs. To apply for an Access Card (or a Digital Access Pass), a customer uploads evidence of disability such as confirmation of disability living allowance, personal independence payments, or particular medical information. They also upload photographic identification, for example a driving licence or passport. The Appellant then examines this material to determine access requirements. If the application is approved, an Access Card (or Digital Access Pass) is issued to the successful applicant. The card carries printed symbols indicating the holder’s specific access requirements......

O’ Neil and others v HMRC [2026] UKUT 13 ( TCC) The appellants were members of a Scottish firm that operated as a hotelier and as a travel agency. In 2007, as a prerequisite to securing borrowing, the firm entered into an interest rate hedging arrangement (the swap) with RBS. In 2014, RBS paid redress directly in relation to that swap to the appellants. By the date of payment, the firm had transferred its trade to Blackpool, a company that was a wholly owned subsidiary of Lythe, itself entirely owned by the appellants, and separately had disposed of its hotels to Lythe. The firm had entirely ceased trading. The appellants omitted the redress from their personal self-assessment returns and no notice to deliver any partnership return was issued for the period in question. The payment likewise did not appear in...

R (on the application of Peter Kadas) v HMRC [2025] EWHC 3322 ( Admin) In May 2024, the AEAT commenced an audit into whether the claimant, Mr Peter Kadas, met the necessary criteria to qualify for the ‘impatriate’ regime, often dubbed ‘ Beckham’s Law’, under which new arrivals in Spain are taxed as non-residents even if they remain resident in Spain. The AEAT’s principal concern was whether Mr Kadas’s employment contract was a sham arrangement devised to enable him to claim the benefits of the impatriate tax rules. During that review, and after Mr Kadas refused to supply particular details directly, the AEAT sent formal enquiries to HMRC in October 2024, relying on Article 26 ( Exchange of Information) of the UK– Spain double tax treaty ( DTT), requesting financial data from two separate UK banks. Having received...

In this issue Companies and corporation tax International Taxes management and litigation VAT Devolved taxes Budgets and Finance Bills Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Companies and corporation tax FTT rules that a licence for a client list and associated data constituted an intangible fixed asset for corporation tax ( Ripe Ltd v HMRC). As noted in last week’s highlights, in Ripe Ltd v HMRC [2025] UKFTT 1606 ( TC), the First-tier Tax Tribunal ( FTT) upheld the taxpayer’s appeal against closure notices and assessments that had refused corporation tax relief for amortisation of a licence over a client list and related data, HMRC’s stance being that the licence was not an intangible fixed asset ( IFA). Although the issues arose before the...

Littlewoods Ltd v HMRC [2025] UKFTT 1602 ( TC) The taxpayer traded in retail goods, while its model also depended on offering credit to customers, often to uplift the ticket price of items that would otherwise be out of reach. HMRC contended that VAT incurred on photography expenses—such as product images deployed on the Appellant’s website to drive sales—had a connection not only with the taxable supply of goods but also with exempt financing supplies. On that basis, HMRC said the related input tax should be treated as a residual cost within the partial exemption methodology. The Appellant maintained that those photography outlays were attributable solely to the taxable sale of goods for the purposes of the partial exemption calculation. In its view, the photography costs concerned only taxable goods sales......

HMRC v Sintra Global Inc and another [2025] EWCA Civ 1661 Mr Malde was deeply involved in the alcohol sector, operating his trade through a network of corporate entities and companies. Among them was Sintra Global Inc ( Global), one of those corporate vehicles. HMRC formed the view that Global played a part in the dishonest diversion of alcohol from the EU into the UK, using a technique described as ‘inward diversion fraud’. Global failed to register for VAT and did not declare any VAT or excise duty, nor did it otherwise account for those taxes. HMRC therefore issued multiple decisions and assessments to Global, including: a notification that it was liable to be registered for VAT a ‘best of judgment’ VAT assessment under section 73 of the Value Added Tax Act 1994 in the sum of about £8.9m a penalty...

Ripe Ltd v HMRC [2025] UKFTT 1606 ( TC) Mr and Mrs Glazer had been partners at an accountancy practice ( GCA). They left GCA in May 2007 intending to establish a new firm with a third individual, Mr Dewani. To operate the new venture, the Glazers set up a limited liability partnership ( LLP). Later in 2007, Mr Glazer acquired from GCA a licence to a client list and associated data (the asset). Instead of placing the asset within the LLP, the Glazers incorporated the taxpayer company; Mr Glazer then sold the asset to that company, which subsequently licensed it to the LLP. This structure was said to be required to ring-fence the respective client portfolios of the Glazers and Mr Dewani in case the merger failed. No formal licence agreement existed between the LLP and the company. The company received a licence fee and,...

The Commissioners for His Majesty’s Revenue and Customs v Sintra Global, Inc and Parul Malde [2025] EWCA Civ 1661 What are the practical implications of this case? It is settled law that HMRC must substantiate any penalty it imposes. Yet the Court of Appeal in Sintra makes clear that this obligation does not extend to proving the correctness of the underlying tax charge. Consequently, the taxpayer carries the onus of showing the liability is mistaken, while HMRC remain responsible for the penalty’s tailored aspects, including culpability and quantification. The ruling matters most where only the penalty is appealed and there has been no prior determination of the core tax position. The Court of Appeal brings the burden of proof in penalty disputes into line with that which would have applied on an appeal against the substantive assessments themselves. This averts...

In this issue: Budgets and Finance Bills International Real estate tax Employment taxes Taxes management and litigation VAT Companies and corporation tax Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Budgets and Finance Bills Committee of the whole House set to consider FB 2026 clauses on 12 and 13 January 2026. As flagged in the highlights dated 18 December 2025, following the Bill’s second reading on 16 December 2025, the House of Commons referred specified elements of FB 2026 to a Committee of the whole House. That Committee will take those clauses on 12 and 13 January 2026. The Public Bill Committee, which will scrutinise the remainder of the Bill, is expected to finish its consideration by 26 February 2026. See: Finance Bill 2026 and...

In the 2025 Budget, the government set out a package of VAT changes for UK firms that need to be grasped and prepared for before their 2026 launch. They affect how businesses set prices for PHV services. From 2 January 2026, VAT-registered PHV and taxi operators that enter into direct contracts with customers must add 20% VAT to the entire fare, as they will be expressly carved out of TOMS; see clause 79 of the Finance Bill 2026 (as introduced). In London, regulation already requires operators to contract directly with customers as a licensing requirement. In other regions, the position depends on how agreements are set up. What will this mean for operators and customers? At present, most private hire and minicab drivers who deal directly with passengers do not have to levy VAT on passenger fares. Typically this is because these...

Tower One St George Wharf Ltd v HMRC [2025] EWCA Civ 1588 What are the practical implications of this case? FA 2003, s 53 ordinarily requires SDLT to be computed by reference to the market value where property is transferred to connected companies. By contrast, FA 2003, s 54 sets out several departures from that market value basis. Under Case 3 in FA 2003, s 54(4), an exception applies if the transfer forms part of a distribution of the vendor’s assets and the property has not been within the scope of an SDLT group relief claim during the prior three years. The Court of Appeal’s interpretation of FA 2003, s 54(4) confirms that Case 3 is only disapplied where SDLT group relief was actually obtained, and not merely claimed without success, contrary to HMRC’s position. Significantly, the Court of Appeal also upheld HMRC’s power to rely on FA...

Why is this legislation required? The government points to two main reasons for introducing this scheme. First, there is inconsistency over which tax advisers must register with HMRC. Making registration mandatory will create uniformity across HMRC’s services for all tax advisers. Second, following an October 2024 consultation, the government reported strong support for compulsory registration to ensure advisers are suitably trained, meet minimum standards, and to deter so-called ‘bad actors’ from entering the market. Which advisers will be required to register with HMRC? Subject to the exemptions noted below, a tax adviser may not interact with HMRC unless they are registered. ‘ Interaction’ is defined widely and includes any communication with, or filing of a document to, HMRC. For registration, a ‘tax adviser’ means either: an organisation that, in the course of its business, assists another person with their tax affairs, or an...

Hotel La Tour Ltd v HMRC [2025] UKSC 46 The appellant, HLT, held the share capital of its subsidiary, Hotel La Tour Birmingham Ltd ( HLTB), which managed a hotel in Birmingham. That company was sold in part to help fund the build and development of a new hotel in Milton Keynes, with the remaining deficit met through a bank loan. HLT incurred professional costs of £382,900 plus £76,823 VAT, and the central question was whether that VAT could be recovered. HMRC denied the input tax deduction on the basis that the expenditure was linked to an exempt share disposal. HLT (broadly) contended that the inputs were deductible because, as a matter of fact and law, the relevant output to which the services were most closely connected was not the exempt share transaction, but its wider hotel trading business, consisting of taxable supplies. The...

Hotel La Tour Ltd v HMRC [2025] UKSC 46 Background The appellant, Hotel La Tour Ltd ( HLT), held the entire issued share capital of its subsidiary, Hotel La Tour Birmingham Ltd ( HLTB), which ran a luxury hotel in Birmingham. HLT also supplied management services to HLTB. By mid-2015, HLT resolved to construct and develop a new hotel in Milton Keynes. The acquisition and development were funded partly through the disposal of HLTB and partly via bank borrowing. To facilitate the sale of HLTB, HLT incurred professional fees totalling £382,900, with £76,823 of VAT charged on those services. The question on appeal is whether HLT is entitled to reclaim that VAT from HMRC. VAT charged to a consumer on goods or services is added by the trader to the sale price (output transactions), and the trader then accounts to HMRC for that amount as output VAT. Where a...