Legal News

FTT finds there was no power for HMRC to deny Soft Drinks Industry Levy ( SDIL) export credits for periods for which the taxpayer was not liable to account for SDIL ( Millennium Cash & Carry Ltd v HMRC) Millennium Cash & Carry Ltd v HMRC [2025] UKFTT 865 ( TC) The First-tier Tribunal held that HMRC lacked authority to refuse SDIL export credits for periods when the taxpayer had no obligation to account for the levy. Introduced in 2018 as part of the government’s drive to combat childhood obesity, the SDIL is the subject of this first-ever FTT case. The taxpayer, a wholesaler of alcoholic and soft drinks, imported beverages liable to SDIL for sale in the UK. It registered for SDIL in 2018 and, across multiple returns, sought SDIL credits for drinks that were...

HM Revenue and Customs ( HMRC) stated in an update that the combined value of tax and National Insurance ( NI) relief on pension contributions increased to £52.5bn in the 2023/24 tax year, up from £50.1bn in the previous corresponding period. These figures are likely to intensify talk of a raid on pension tax relief by Chancellor Rachel Reeves in the Autumn Statement, which she is expected to present between late October and early November 2025. Tom Selby, Director of Public Policy at investment platform AJ Bell, said that, with Rachel Reeves hemmed in by an ever-tightening fiscal straitjacket, the chancellor faces an ever more frantic hunt for the tens of billions of pounds likely still required to honour her ‘cast iron’ borrowing rules in the budget......

In this issue: Companies and corporation tax Incentivised investment Indirect taxes Individuals and capital gains tax International Daily and weekly news alerts Dates for your diary Trackers New and updated content Useful information Companies and corporation tax HMRC trialling the removal of corporation tax payment reminder letters The CIOT has outlined an HMRC pilot starting in July 2025 under which corporation tax return and payment reminders ( CT208) will not be issued to a cohort of companies represented by an authorised agent. The exercise aims to gauge whether withdrawing CT208 affects businesses supported by agents. To track any effect on the management of corporation tax debt, the pilot is scheduled to run until December 2025, but HMRC will stop it early if there is a notable rise in overall corporation tax debt. This sits...

York SD Ltd and others v HMRC [2025] UKFTT 877 ( TC) The EIS encourages backing for early‑stage companies by enabling investors to claim substantial income tax and capital gains tax reliefs. As a result, the qualifying rules are tightly drawn. Investors cannot obtain relief without HMRC’s authorisation, given by way of a compliance certificate issued to the company. To secure that certificate, the company must file a compliance statement with HMRC, supported by information and declarations. Even once EIS authorisation is granted, HMRC may later withdraw relief and reclaim any related tax from investors in specified circumstances. This case arose from HMRC’s decision to remove relief from investors in six UK companies set up to trade in solar electricity generation in Spain and Portugal through local subsidiaries. The UK companies were incorporated in 2015, and the relevant shares were issued in late 2015 and early...

Campbell v HMRC [2025] UKFTT 867 ( TC) Over five years, the taxpayer acquired and disposed of four dwellings yet failed to tell HMRC about any tax liability. HMRC created a return for the year of the last sale and, after opening an enquiry, raised assessments and a closure notice covering three tax years (two disposals occurred in a single year), all arising from that process and addressing the undeclared transactions. These subjected him to income tax on the footing that he was trading, or alternatively to CGT, as a fall-back position advanced by the department. Penalties were also levied for a deliberate failure to notify his liability, by HMRC. He appealed, contending he was not trading and was not chargeable to CGT, as the job-related accommodation exemption in section 222(8) of the Taxation of Chargeable Gains Act 1992 ( TCGA 1992) applied,...

D. E. L. T. A. Merseyside Ltd v Uber Britannia Ltd UKSC/2024/0119 Background This appeal concerns the proper interpretation of the statutory framework governing the provision of private hire vehicles (‘ PHVs’). PHVs, unlike traditional taxis, are not permitted to ply for hire on the streets and must instead be booked in advance through an ‘operator’. Uber, one of the parties to the appeal ( Uber Britannia Ltd, or ‘ UBL’), is a well known PHV operator. The relevant framework is contained in Part II of the Local Government ( Miscellaneous Provisions) Act 1976 as amended ( LG( MP) A 1976). It regulates the PHV sector outside London (and Plymouth) by imposing a ‘triple licensing lock’, under which the operator, the driver, and the vehicle each require a licence from the appropriate local authority. Historically, the PHV trade has run under several different models: an...

What was the background to HMRC’s consultation? In the 2024 Autumn Budget, the Chancellor set out her intention to bring inheritance tax into scope for pension funds that remain within an individual’s pension at death. While pension entitlements have, as a rule, sat outside the inheritance tax net, there has long been anxiety that pensions could be deployed as an estate planning device in ways that amount to inheritance tax avoidance. This anxiety sharpened following the relaxation of pension tax rules under the Finance Act 2004 ( FA 2004), which took effect in April 2006. From that point, the fear was that savers might shift assets into their pension and simply preserve the pot for their beneficiaries, particularly because FA 2004 removed any compulsion to secure an annuity. To counteract such outcomes, FA 2004 initially incorporated several limiting...

On 21 July 2025 HM Revenue and Customs ( HMRC) issued its reply to the consultation, conducted between October 2024 and January 2025, on bringing unspent pension pots and death benefits within the scope of IHT, together with a policy paper and draft legislation that confirm the change to the rules on the IHT treatment of unused pension funds, due to formally apply from 6 April 2027......

Michael Kelly v HMRC [2025] UKFTT 852 ( TC) The taxpayer belonged to two film partnerships, Invicta and Echo, and included the resulting income on his self-assessment income tax returns. HMRC issued closure notices to Invicta and, pursuant to section 28B(4) of the Taxes Management Act 1970 ( TMA 1970), made a consequential amendment to the taxpayer’s personal returns. He appealed to the FTT. HMRC contended that the FTT lacked jurisdiction and that the appeal should be struck out under r 8(2)(a) of the Tribunal Procedure ( First-tier Tribunal) ( Tax Chamber) Rules 2009 ( FTT Rules), SI 2009/273, on the basis that there was no right of appeal under any relevant provisions of the TMA 1970. The taxpayer argued that HMRC had made two amendments: the consequential amendment relating to Invicta, and an erroneous uplift to his personal income...

Haworth and others v Revenue and Customs Commissioners [2025] EWCA Civ 822 What are the practical implications of this case? Double tax treaties require the identification of a single country of residence. For entities rather than individuals, the pre‑2017 OECD Model Convention applied a tiebreak that treated a dual‑resident person as resident where its place of effective management was located. From 2017, the Model moved to resolution via a mutual agreement procedure ( MAP) between the contracting states, although place of effective management remains a relevant consideration in that exercise. This decision will therefore be significant for advisers working with entities—such as companies and trusts—that are resident both in the UK and another jurisdiction, when considering how a DTT applies. It is the first appellate ruling to offer granular guidance to practitioners and tribunals on how to......

Trachtenberg v Revenue and Customs Commissioners [2025] UKUT 206 ( TCC) What are the practical implications of this case? Following the UT’s rejection of Mr Trachtenberg’s appeal, and its conclusion that HMRC do have authority to assess income tax chargeable under FA 2004, ss 208 and 209 through the TMA 1970, the assessments issued by HMRC are lawfully made and HMRC are empowered to recover income tax where it has not been self-assessed. If the appeal had succeeded, the practical consequences would be hard to determine, because HMRC have already issued many hundreds, if not thousands, of income tax assessments under FA 2004, ss 208 and 209, relating to unauthorised payments made by a pension scheme that are liable to the unauthorised payments charge and the accompanying surcharge. Accordingly, HMRC’s assessments stand as validly raised, and the department retains power to collect amounts due where...

Currys Retail Ltd v HMRC [2025] UKFTT 762 ( TC) Between 2004 and 2007, the taxpayer—previously named The Carphone Warehouse Ltd ( CPW)—took over the businesses (the Businesses) together with the associated goodwill ( Goodwill) of four companies operating within the same chargeable gains group. Although the aggregate value of the Goodwill was around £108m, TCGA 1992, s 171 applied so that these transfers did not trigger a tax charge. In 2008, as part of a joint venture arrangement with the Best Buy group, CPW exited membership of the chargeable gains group. Where a company departs a chargeable gains group holding an asset (other than a trading asset) that it acquired from another company in that group within the previous six years, TCGA 1992, s 179(3) treats the company as having disposed of, and immediately reacquired, that asset at the market value...

In this issue: Budgets and Finance Bills International Taxes management and litigation Stamp and transfer taxes Individuals and income tax Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Budgets and Finance Bills Legislation Day is on 21 July As noted in last week’s Tax weekly highlights, Legislation Day falls on Monday 21 July 2025. The government will release draft clauses for the forthcoming Finance Bill, reflecting previously announced measures, together with explanatory notes, tax information and impact notes, replies to consultations, and other supporting papers. As ever, we will produce commentary on the draft text and any documents unveiled on Legislation Day 2025. See: LNB News 01/01/0001 3155. International Court of Appeal rules on the interpretation of the UK- Japan DTT ( Vietjet Aviation Joint Stock Company v FW...

R (on the application of Thomas Holdings Ltd and others) v HMRC [2025] EWHC 1660 ( Admin) The proceedings concerned judicial review challenges to AMLD assessments regarding a category of machines operated by the claimants in amusement arcades and bingo halls. It was undisputed that the assessments were correct, as the machines properly fell to be treated as 'gaming machines' under section 25 of the Betting and Gaming Duties Act 1981, where 'the outcome of the game is inherent in the action of the machine'. The claimants nevertheless maintained that, for each assessment, ESC 3.4 or 3.5 (both in force at the relevant time) ought to have been applied, with the result that the AMLD liabilities would not be enforced. ESC 3.4 (misunderstanding) and ESC 3.5 (misdirection) related to VAT and are now obsolete, but HMRC accepted they could, in principle, apply on the facts and...

Stenhouse and another v HMRC [2025] UKFTT 820 ( TC) and Abbey Healthcare v HMRC [2025] UKFTT 822 ( TC) In Stenhouse, HMRC issued discovery assessments under section 29 of the Taxes Management Act 1970 totalling £450,000, relying on the extended six‑year window for careless conduct. Further penalties were imposed for several Schedule 36 Finance Act 2008 information notices that had not been observed, with non‑compliance forming the basis for those penalties. HMRC ultimately rejected out‑of‑time appeals against the assessments and the penalties, pointing to delays ranging from 68 to 33 months as excessive. The appellants asked the FTT to allow a late appeal. They contended they could not appeal until they had obtained RBS bank statements, as without them they were unable to challenge HMRC’s calculations. Securing those statements proved difficult, partly because of...

Vietjet Aviation Joint Stock Company v FW Aviation ( Holdings) 1 Ltd [2025] EWCA Civ 783 What are the practical implications of this case? The Court of Appeal reaffirmed the summary of the principles governing the interpretation of tax treaties set out by Lady Justice Falk in Royal Bank of Canada v HMRC [2023] EWCA Civ 695, [2023] STC 1205, a position later upheld by the Supreme Court ( Royal Bank of Canada v Revenue and Customs Commissioners [2025] UKSC 2, [2025]1 WLR 939). Practitioners will be reassured that the Court of Appeal left untouched centuries of tax law that firmly preserves the distinction between trading and investment. Viet Jet contended that the trial judge had fallen into error in concluding that, because FWA carried on a trade, it was not ‘making or managing investments’......

Abbotsford Property Group Ltd and another v Revenue Scotland [2025] FTSTC 9 The dispute arose from 2017 property transactions in which both appellants claimed group relief in their LBTT returns. That entitlement fell away on 31 May 2017 when each appellant’s share capital was subdivided and further shares were issued to persons other than the parent holding company, thereby reducing its interest below the qualifying threshold for group relief. Saffery Champness LLP (the firm’s name at the time), acting as the appellants’ tax adviser (the Tax Adviser), made a voluntary disclosure in February 2022, admitting that the original returns were inaccurate. It was accepted between the parties that Revenue Scotland’s power to issue an assessment to LBTT existed only by virtue of sections 98(1) and 102 of the Revenue Scotland and Tax Powers......

In this issue: Budgets and Finance Bills Real estate tax International Taxes management and litigation Individuals and income tax Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Budgets and Finance Bills Legislation Day 2025 is on 21 July HM Treasury has formally announced that L-day will be held on Monday 21 July 2025. The government will also issue draft legislation for the forthcoming Finance Bill, reflecting pre-announced policy changes, plus further supporting explanatory notes, tax information and impact notes, replies to consultations and other related documents. See: LNB News 01/01/0001 3155. Real estate tax Court of Appeal confirms property requiring renovation was ‘suitable for use as a dwelling’ for SDLT purposes ( Mudan v HMRC) As noted in last week’s Tax weekly highlights summary, in Mudan v HMRC [2025] EWCA Civ 799, the Court of Appeal upheld both the First-tier Tax Tribunal and Upper Tribunal decisions, confirming that a...

In a letter to Parliament dated 26 June 2025 and made public on 7 July 2025, HMRC said its projection follows a parliamentary consultation and a May 2025 National Audit Office ( NAO) report that found the scale of tax avoidance and evasion among the wealthy could be far greater than the NAO had previously believed. HMRC will channel increased investment into bolstering offshore non-compliance inquiries, particularly suspected tax fraud by wealthy individuals, companies they control and other connected bodies. It also expects added headcount to deliver an overall 20% rise in decisions to bring charges against alleged tax cheats. The letter set out penalties imposed for offshore evasion and non-compliance since the 2018–19 tax year, totalling more than £125m. The overwhelming majority by volume (around 6,000 separate penalties) and by value (circa £38m) related to failures to file tax returns, HMRC said. HMRC also...

D’ Angelin v HMRC [2025] UKUT 212 ( TCC) The individual was UK-resident, non-domiciled and taxed on the remittance basis. In 2016 he brought £1.5m of overseas income into the UK and invested the funds in a UK company of which he was the sole shareholder and director. The company traded as advisers to worldwide clients and to family holdings. He claimed business investment relief under ITA 2007, s 809VA in relation to that investment, with the consequence that the £1.5m was treated as not remitted to the UK (and therefore not taxable). During 2017/18 he incurred personal spending on the company’s credit card – covering items from an i Tunes subscription through to private use of a jet – and the charges were posted to his director’s loan account ( DLA). The DLA balance rose to a maximum of roughly £71,000 at one point...