Legal News

Paul Collingwood v HMRC [2025] UKFTT 1065 ( TC) The taxpayer entered into sponsorship contracts to deliver promotional services for two brands and a professional body, and purported to transfer the benefit of those contracts, together with his intellectual property rights and comparable intangible rights, to his company. The FTT concluded that nothing within the assignments granted the company any entitlement to supply the taxpayer’s personal services. In addition, two of the sponsorship contracts could not be assigned without the sponsors’ written consent, yet the taxpayer provided no evidence to demonstrate that such consent was obtained or that the benefits were validly assigned. Although the sponsorship receipts were recorded in the company’s accounts, there was likewise no evidence that the......

The Prudential Assurance Company Ltd v Commissioners for His Majesty’s Revenue and Customs [2025] UKSC 34 Background This appeal addresses how section 43 of the Value Added Tax Act 1994 ( VATA 1994), which governs VAT groups, interacts with domestic and EU rules fixing the moment at which services between companies are treated as supplied for VAT. Under VATA 1994, s 43, companies within the same corporate group may elect to be regarded as a single taxable person for VAT. Consequently, where one group member provides goods or services to another member, no VAT is charged on that intra-group transaction. This follows from the statutory direction that, within a VAT group, any supply by one member to another is to be ignored for VAT purposes. The issue arises where there is a gap between carrying out the services and issuing or paying the VAT...

In this issue: VAT Taxes management and litigation Companies and corporation tax Devolution Anti-avoidance International Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information VAT Supreme Court upholds Court of Appeal’s decision that services invoiced and paid after leaving a VAT group were subject to VAT ( The Prudential Assurance Company Ltd v HMRC) In [2025] UKSC 34 ( The Prudential Assurance Company), the Supreme Court rejected Prudential’s appeal, affirming the Court of Appeal and Upper Tribunal ( UT) that VAT was correctly payable on success fees billed by Silverfleet after it had exited Prudential’s VAT group. Although Silverfleet carried out the fund management work while both entities were within the same VAT group, the performance fees were conditional on the funds surpassing a stated...

LCP warned on 8 September 2025 The firm cautioned that 'low-hanging fruit' budget options slated for 26 November 2025—curbing pension tax relief and altering rules on accessing retirement pots—carry serious political and economic risks. Speculation suggests the Labour government could remove higher rates of tax relief. Some organisations are also urging further tax reforms, such as abolishing the right to take 25% of a pension as a tax-free lump sum. Steve Webb, ex-pensions minister and now an LCP consultant, argued against such moves. LCP stressed that such changes could backfire politically and economically. and prove short-sighted overall too. As he put it, ' Raiding pension tax relief may look superficially attractive for a cash-strapped chancellor', he......

SC Arcomet Towercranes SRL v Direcţia Generală Regională a Finanţelor Publice Bucureşti, Administraţia Fiscală pentru Contribuabili Mijlocii Bucureşti , Case C-726/23 This case examined the VAT treatment linked to transfer pricing between a Belgian parent and its Romanian subsidiary. SC Arcomet Towercranes SRL ( Arcomet Romania) procured cranes for onward sale or hire to customers, while its parent, Arcomet Belgium, delivered a range of commercial support. In 2010, a transfer pricing analysis established a target profit margin corridor for Arcomet Romania. Where profitability exceeded that corridor, Arcomet Belgium raised an equalisation invoice to align results with the agreed transfer pricing policy. In total, three invoices were issued: two were accounted for by Arcomet Romania under the reverse charge, while the third was regarded as outside the scope of VAT......

In this issue: Budgets and Finance Bills Taxes management and litigation Funds International Lex Talk®Tax: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Budgets and Finance Bills Date of Budget 2025 announced The government has confirmed Chancellor Reeves will present Budget 2025 on 26 November 2025. See: LNB News 03/09/2025. Taxes management and litigation News Analysis published on FTT decision in Lexgreen Services In Lexgreen Services Ltd [2025] UKFTT 1019 ( TC), the First-tier Tax Tribunal ( FTT) held a company may incur inheritance tax under section 201(1)(d) of the Inheritance Tax Act 1984 where it is a ‘live company’ at the point of relevant transfer. See News Analysis: FTT explores the meaning of life ( Lexgreen Services Ltd v HMRC). News Analysis published on...

Tinkler v HMRC [2025] UKFTT 1016 ( TC) The taxpayer filed returns over seven years on the footing that he himself ran a single trade comprising horse breeding alongside the training and racing of horses. HMRC opened enquiries and served closure notices which, in six of those years, asserted that the trading losses had been exaggerated. HMRC further maintained that, in its view, the taxpayer conducted a trade as a breeder, but that the horse racing activity did not amount to a trade. This led to a significant reduction in the overall quantum of the losses. In the seventh year the taxpayer showed a profit; the closure notice stated that this profit was overstated on the same footing. Ahead of the appeal, HMRC produced a statement of case setting out several alternative contentions. The taxpayer asked the FTT for a...

Lexgreen Services Ltd v HMRC [2025] UKFTT 1019 ( TC) This served as a lead case under Rule 18 of the Tribunal Procedure ( First-tier Tribunal) ( Tax Chamber) Rules 2009. The single question of law identified pursuant to Rule 18 was whether a company that had made contributions to a trust is liable for any inheritance tax arising on the trust’s tenth anniversary by reason of IHTA 1984, s 201(1)(d). The appellant, Lexgreen Services Ltd, created a remuneration trust in 2005 and, over the ensuing years, paid sums into the trust totalling £6.5m. A company incorporated in Jersey was appointed as trustee. It was common ground that, at the trust’s ten-year anniversary in 2015, a tax charge arose (under IHTA 1984, s 64). In 2020, HMRC issued a Notice of Determination, contending that the appellant was liable for that charge pursuant to IHTA 1984, s...

In this issue: Taxes management and litigation Employment taxes Pensions Daily and weekly news alerts New and updated content Dates for your diary Trackers Taxes management and litigation HMRC releases Agent Update: Issue 134 The newest edition offers a concise summary of updates and reminders for tax practitioners, featuring: Commentary from Richard Las, Director at HMRC’s Fraud Investigation Service, on Elphysic v HMRC [2025] UKUT 236 ( TCC). He welcomed the tribunal’s finding that the mini umbrella company model deployed in these cases is fraudulent, noting that such behaviour distorts fair competition, and confirming HMRC will continue to use both civil and criminal powers to pursue those facilitating it. A reminder to companies with a registered office in Northern Ireland that the extra advantage delivered by the enhanced research and development intensive relief ( ERIS), beyond the benefit available under the research and development expenditure credit ( RDEC), is classed as state aid......

Background Between July and November 2014, John Jones Civil Engineering & Groundworks Ltd (the appellant) tipped 410 lorryloads of building waste (soil, stone, brick, etc) into natural depressions at that location on a Herefordshire farm. The operation was unlawful because it proceeded without the requisite environmental permit and inflicted significant environmental damage (killing Great Crested Newts, a protected species). The Environment Agency brought a prosecution; the company admitted the offence and, in 2018, received a £50,000 fine (plus costs) that year. In December 2018, the Crown Court confirmed that penalty. Tax change Meanwhile, a significant alteration in tax rules had taken effect. From 1 April 2018, landfill tax was widened to include disposals at unauthorised waste sites (rather than only licensed landfills). Parliament enacted the reform to discourage unlawful dumping by reducing its profitability, thereby strengthening the ‘polluter pays’ principle. Under Schedule 12 to the Finance Act 2018, any...

Masters v HMRC [2025] UKFTT 967 ( TC) Employed in the UK by Tesco, Mr Masters had joined Tesco PLC’s defined benefit Pension Scheme back in 1983. In April 2016, he arranged for the cash equivalent value of his defined benefit rights—just shy of £6m—to be transferred into a UK SIPP vehicle. He relocated to Portugal in March 2019 and, from the 2019–20 tax year onwards, was treated as non‑ UK tax resident. While living in Portugal he was taxed under the Non‑ Habitual Resident regime, benefitting from exemptions on foreign‑source income, which encompassed withdrawals of £3.5m from his SIPP. Nevertheless, those withdrawals were taxed at source in the UK, resulting in £1.5m of tax being paid. HMRC then operated a PAYE tax code on the SIPP pension; Mr Masters sought instead the issue of an NT (no tax) code. In July 2020, he filed his UK...

All seven judges of the High Court of Australia broadly concurred on the construction of an agreement under which Pepsi Co would transfer beverage concentrate, trade marks and other intellectual property to Schweppes Australia Pty Ltd for domestic production and distribution. Although, by a margin of 4–3, the court held that Schweppes’ payments were not royalties, the bench unanimously concluded that, royalty or not, the sums were not income that could attract withholding tax for Pepsi. The majority determined that sums remitted to a Pepsi entity— Pepsi Co Beverage Singapore Pty Ltd—did not constitute royalties. Even on the contrary assumption, no withholding would arise because Schweppes was obliged by contract to buy the concentrate on terms dictated by Pepsi, the court observed. Under the arrangement, Pepsi and its affiliate Stokely‑ Van Camp Inc, owner of Gatorade, each undertook to “sell or cause to be sold by one of...

In this issue: Taxes management and litigation International Employment taxes Devolution Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Taxes management and litigation HMRC publishes quarterly instalment interest rates update Following last week’s decision by the Bank of England’s Monetary Policy Committee to trim the base rate by 0.25 percentage points to 4%, effective 7 August 2025, HMRC has, as anticipated, confirmed when quarterly instalments interest rates will mirror this 0.25 percentage point reduction. From 18 August 2025, the rate applied to underpaid quarterly instalment payments will fall to 6.5%. From the same date, the rate HMRC pays on overpaid quarterly instalments and on early corporation tax payments not due by instalments will move down to 3.75%. As noted in last week’s Weekly Highlights, late payment and...

In this issue: VAT Taxes management and litigation Employment taxes Real estate tax Individuals and income tax Budgets and Finance Bills Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information VAT UT overturns FTT to find that HMRC could deregister ‘mini-umbrella companies’ from VAT ( Elphysic Ltd v HMRC) In Elphysic Ltd v HMRC [2025] UKUT 236 ( TCC), the Upper Tribunal ( UT) set aside the First-tier Tax Tribunal’s ( FTT) conclusion that HMRC lacked authority to remove the taxpayers from the VAT register. The UT also dismissed the taxpayers’ cross-appeals, thereby upholding the FTT’s findings that they were not entitled to use the VAT flat rate scheme and could not claim National Insurance Contributions ( NICs) employment allowances. See News Analysis: UT overturns FTT to find that HMRC...

Elphysic Ltd and others v HMRC [2025] UKUT 236 ( TCC) Four taxpayers, among roughly 18,000 mini‑umbrella companies ( MUCs), were set up to operate a structure designed to benefit from the VAT flat rate scheme for small businesses and the NIC employment allowance. They engaged workers and supplied them, through chains of intermediaries and agencies, to the end client. Each company was said to be under the control of a sole shareholder‑director resident in the Philippines. HMRC considered that these taxpayers, together with the broader group of MUCs to which they belonged, were used to fragment a much larger enterprise so as to reduce overall VAT and NIC liabilities. Consequently, HMRC aimed to refuse the taxpayers access to the VAT flat rate scheme and the NIC employment allowances. HMRC also moved to deregister the taxpayers from VAT on the footing that they had taken part in...

In this issue: VAT Taxes management and litigation International Pensions Indirect taxes Lex Talk®Tax: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information VAT Supreme Court holds that private hire operators outside London and Plymouth are entitled to accept bookings as agents ( D. E. L. T. A. Merseyside Ltd v Uber Britannia Ltd) As noted in last week’s highlights, in D. E. L. T. A. Merseyside Limited v Uber Britannia Limited [2025] UKSC 31, the Supreme Court unanimously rejected Uber Britannia’s appeal and determined that private taxi operators may arrange their businesses to act as agents, thereby reducing the element of the fare that could be subject to VAT. See News Analysis: Supreme Court holds that private hire operators outside London and Plymouth are entitled to accept bookings as agents ( D. E. L. T. A. Merseyside Ltd and another v Uber Britannia Ltd). FTT finds that...

UT considers whether the decisions in Martland and Katib are binding on the FTT ( Medpro Healthcare Ltd & Another v HMRC) Medpro Healthcare Ltd & Another v HMRC [2025] UKUT 255 ( TCC) The Upper Tribunal stated that section 83G(6) of the Value Added Tax Act 1994 affords the First-tier Tribunal an unrestricted power to permit late appeals. A key issue on this appeal was whether that broad discretion has been improperly confined by prior UT rulings. In Martland v HMRC [2018] UKUT 178 ( TCC) ( Martland), the UT indicated that, when the FTT decides whether to admit a late appeal, it should adopt a three-step framework: determine the period of the delay identify the cause(s) of the delay undertake a balancing evaluation of all the circumstances of the case In HMRC v Katib [2019]......

United Carpets ( Franchisor) Ltd v HMRC [2025] UKFTT 895 ( TC) While selecting flooring in one of the appellant’s stores, a customer could also elect to have the installation carried out by an independent, self-employed fitter, with a fitting price indicated but not set by the appellant. Payment to the appellant related solely to the flooring. Where a fitter was introduced by the appellant, that fitter would deliver the flooring to the customer’s home and, before starting work, determine whether the estimate was adequate and, if needed, agree a higher figure with the customer. The fitting charge was payable by the customer direct to the fitter once the work was completed. The appellant received none of the fitting monies and had no knowledge of the sum actually paid for that service......

D. E. L. T. A. Merseyside Ltd and another v Uber Britannia Ltd [2025] UKSC 31 Uber’s business model has faced a series of legal challenges. In R ( United Trade Action Group Ltd) v Transport for London [2021] EWHC 3290 ( Admin) (proceedings in which Uber London Ltd was a party), the High Court declared that the Private Vehicles ( London) Act 1998 renders it unlawful for any operator of private hire vehicles in London to accept a booking unless, acting as principal, it enters into a contract of hire to provide the passenger with the journey that is the subject of the booking under that Act accordingly......

Pensions Schemes Newsletter for July 2025 In its July 2025 Pensions Schemes Newsletter, HMRC said it has issued refunds after processing 12,767 claims lodged between 1 April 2025 and 30 June 2025 by people overcharged under pension flexibility rules. Since the government introduced retirement saving freedoms in 2015, the cumulative amount repaid for pension overtaxation has climbed to more than £1.4bn. These freedoms permit pension scheme members aged 55 and above to take lump sums or draw flexible payments from their pension savings. However, because of a peculiarity in the tax calculation, many savers are initially charged more tax than they truly owe when they first access their pension pots......