Legal Practice Notes

ARCHIVED : This Practice Note has been archived and is not maintained From 31 January 2020 (exit day), the UK ceased to be an EU Member State and its relationship with the EU is governed by the Withdrawal Agreement, which took effect on 1 February 2020. Under the Withdrawal Agreement, on exit day the UK entered an implementation period, during which it continues to be regarded as a Member State for many purposes, including trade. As a third country, the UK can no longer take part in the EU’s political institutions, agencies, offices, bodies and governance structures (save to the limited extent agreed), but the UK must continue to comply with EU law and remain subject to the continuing jurisdiction of the Court of Justice of the European Union in line with the transitional arrangements in the Withdrawal...

This Practice Note outlines retained EU law as it operated in 2021–23, setting out key definitions and concepts with pointers to the relevant provisions of the European Union ( Withdrawal) Act 2018 ( EU( W) A 2018). It further considers the overhaul of retained EU law and its re-labelling as assimilated law from 2024. Wider aspects of the EU( W) A 2018, together with the distinct arrangements and divergences for the UK’s devolved administrations, fall outside the scope of this Practice Note. Evaluation of particular instruments, provisions or rights, and whether they are retained, is likewise excluded. what’s the difference? Both “retained EU law” and “assimilated law” describe the residual body of domestic law that originally stemmed from the UK’s membership of the EU. The labels mark two phases in the domestic legal system’s adjustment to...

Updated March 2025 Introduction The European Commission anticipates that Poland’s GDP growth in 2025 will continue to trail the EU average for a third year in a row. In a volatile setting, provisional data from the Central Statistical Office show GDP in 2024 rose by a modest 2.5% versus 2023, easing from 4.9% in 2022. This tempo points to a measured rebound from earlier strains, chiefly elevated inflation and higher interest rates. Although the final quarter of 2024 recorded some improvement, with year-on-year growth of 3%, it still fell short of expectations. Weaker consumer outlays, held back by flat real wages and pricier credit, have weighed on activity, while geopolitical developments are also exerting pressure. Nevertheless, infrastructure spending and a recovery in exports have offered partial support. Economists expect growth to settle in 2025, though ongoing geopolitical tensions and wider global...

The tax treatment of payments in lieu of notice ( PILONs) Significant changes to sections 402–404 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003) took effect on 6 April 2018. In essence, every PILON—whether made under an express or implied contractual PILON clause or made without any such provision—is now fully taxable and liable to both employee and employer National Insurance contributions ( NICs). This position is delivered through a requirement for employers to perform a post-employment notice pay ( PENP) calculation. As set out below, that calculation enables employers to determine which portion of a termination payment falls within the tax charge. Consequently, the pre‑2018 distinction between PILONs paid under a contractual PILON clause (previously wholly taxable) and PILONs not paid under a contractual provision (which could access the £30,000 tax exemption and were entirely outside NICs) no longer...

Updated in January 2026 Introduction The Philippines has continued to deliver solid, resilient economic outcomes, keeping its place among Southeast Asia’s faster-growing economies. From 2010 to 2019, average annual GDP growth was around 6.4%, a clear step up from the 4.5% average recorded between 2000 and 2009. Despite global headwinds from the coronavirus ( COVID-19) pandemic in 2020, the country showed durability; GDP growth recovered to 5.6% in 2023, the fastest in Southeast Asia. Credit assessments remain positive too: as of June 2024, Fitch Ratings affirmed the Long- Term Foreign- Currency Issuer Default Rating at ‘ BBB’ with a stable outlook, indicating robust medium-term growth prospects. This guide highlights key matters a new business will need to understand and address before starting operations in the Philippines. It is not exhaustive, and specific Philippine legal advice should always be obtained prior to setting up and running a...

The concept of a ‘permanent establishment’ ( PE) The idea of a PE is articulated in Article 5 of the Organisation for Economic Co‑operation and Development ( OECD) Model Tax Convention ( OECD MTC). Article 5 of the UN Model Tax Convention ( UN MTC) adopts a similar, yet broader, approach. In broad terms, a company resident in one territory (the home state) is regarded as having a PE in another (the host state) where it has: a fixed place of business in the host state a dependent agent in the host state acting for it for the UN MTC only, employees or other personnel engaged by the enterprise to deliver services in the host state for periods adding up to six months within any 12‑month period — referred to as a services PE Under Article 7 ( Business Profits) of the OECD MTC, the host...

Performance ratchets This Practice Note explores the tax implications for the UK management team in a private equity-backed management buyout ( MBO) that arise specifically from performance ratchets. Performance ratchets are a device employed by private equity firms investing in MBOs to motivate management and align their interests with those of the private equity backer. The success of an MBO is typically highly reliant on the management team. Managers can be incentivised, and their interests aligned, by subscribing for shares in the top company of the acquisition group ( Newco 1), giving them a stake in the proceeds of a future private equity exit (ie on top of any salary). Performance ratchets give management the chance to uplift the value of their equity holding further where defined performance targets are achieved. This Practice Note concentrates on the tax issues arising...

ARCHIVED: This archived Practice Note sets out rules that cover companies which most recently opted to enter the patent box regime for an accounting period starting before 1 July 2016, in connection with the business’s qualifying IP that was filed for or purchased before 1 July 2016 (or, in certain instances, 2 January 2016). A separate set of provisions—outlined in Practice Note: Patent box calculation of relief—new rules—governs entrants joining the patent box on or after 1 July 2016, and then applies universally to all companies from 1 July 2021. Under the patent box, qualifying profits are in effect subject to corporation tax at a reduced 10% rate. The statutory mechanism delivers this relief by permitting a deduction when computing the trading profits of the company for the relevant accounting period in question. For broader background and further details on the patent box, refer to...

ARCHIVED This archived Practice Note sets out the tax implications of IP completion day. It captures the position immediately after IP completion day on 31 December 2020. It is no longer updated and serves only as background. For more detail, see: Brexit, assimilated law and tax—overview. From exit day (11 pm on 31 January 2020), the UK was no longer an EU Member State and stopped taking part in the EU’s political bodies and governance frameworks. Under the transitional measures in Part 4 of the Withdrawal Agreement, exit day triggered an 11‑month implementation period during which, for many purposes, the EU continued to treat the UK as a Member State. That implementation period ran from exit day to IP completion day (11 pm on 31 December 2020). Throughout that time, the UK observed its obligations under EU law (including EU treaties,...

This Practice Note is about: a taxpayer’s entitlement to interest on refunds of tax paid in excess, whether under a statutory framework, the common law (notably the law of restitution), or EU law, retained EU law, or assimilated law the corporation tax charge applicable to restitution interest for tax overpaid before 31 December 2020, the EU law question of whether such overpayments may give rise to a right to damages This Practice Note cites EU-derived legislation and case law. The UK ceased to be an EU Member State on 31 January 2020. From that date an implementation period applied, during which the UK continued, for many purposes, to be treated as a Member State and remained subject to EU law. The implementation period ended at 11 pm on 31 December 2020. At that point, a body of EU-derived rights and...

To cut expenditure and drive efficiency, many companies now sub-contract elements of their operations to external providers, commonly referred to as ‘outsourcing’. There are no dedicated statutes, tax rules included, that govern outsourcing arrangements, and the term has no precise legal definition. As a result, each outsourcing deal turns on its own facts and throws up a different combination of tax considerations, VAT among them. This Practice Note highlights the key VAT points to assess when dealing with outsourcing. For broader tax considerations, see Practice Note: Outsourcing—general tax issues. This Practice Note addresses contractual outsourcing; for joint venture outsourcing, see: Joint ventures and tax—overview... VAT liability of outsourced supply A central question for outsourced services is how their VAT liability is treated. As a general rule, unless the services fall within a VAT exemption, qualify for the zero rate, or sit outside the scope of VAT (for...

The Non-resident Landlords Scheme ( NRL Scheme) Under the Non-resident Landlords Scheme, income tax at the basic rate must be withheld from rental payments due to non-resident landlords from a UK property business and remitted to HMRC. The NRL Scheme is generally operated by: letting agents (irrespective of the rent level); or where there is no letting agent, tenants who: pay more than £100 per week (or £5,200 per year); or, where occupation is for under one year, a proportionate sum determined by the duration of occupation; or or those notified by HMRC that they must operate the NRL Scheme. HMRC issues detailed guidance for letting agents and tenants on how the NRL Scheme should be run and their...

STOP PRESS Major updates to the UK prospectus framework took effect on 19 January 2026. The fresh regime for public offers of securities and for admissions to trading in the UK is primarily housed in the Public Offers and Admissions to Trading Regulations 2024, SI 2024/105 (the POATRs), together with the FCA sourcebook, The Prospectus Rules: Admission to Trading on a Regulated Market ( PRM). The UK Prospectus Regulation and the FCA Prospectus Regulation Rules have been revoked in the UK. The package aims to streamline capital raising and to markedly cut the instances where an issuer must produce an FCA approved prospectus when making a further share issue. For comprehensive details of the reforms, see Practice Note: UK prospectus regime reform. Note that this Practice Note describes the prospectus regime that applied before 19 January 2026......

This Practice Note is authored by Anne Redston, Barrister. It reflects her personal perspective; she is not authorised to speak for the Tribunals Service or the judiciary. This has long been important, as people seek to shield their financial affairs from public scrutiny. This Practice Note considers: whether hearings may take place in private whether the final decision can be anonymised, and whether documents or information connected to the hearing can be anonymised It addresses the position in the First-tier Tax Tribunal ( FTT) and the Upper Tribunal ( UT). This summary does not cover every circumstance, and you may need further advice for your client’s situation. It does not extend to appeals or reviews of decisions by Revenue Scotland concerning any Scottish devolved taxes within the jurisdiction of the First-tier Tribunal for Scotland ( Tax Chamber). For details, see Practice Note: Appealing a Revenue Scotland...

ARCHIVED: This Practice Note has been archived and is no longer maintained. It addresses the previous CFC regime that applied until the first accounting period of a CFC beginning on or after 1 January 2013. After determining that a company is a controlled foreign company (a CFC), a CFC tax charge may still not arise if one of the available exceptions is met. There are currently eight exceptions to the operation of the CFC rules: exempt activities CFCs that are trading companies with a limited UK connection CFCs that exploit intellectual property with a limited UK connection chargeable profits below a de minimis threshold of £50,000 per 12 month period relevant profits (calculated differently from chargeable profits) under a de minimis threshold of £200,000 per 12 month period CFCs resident in an excluded territory ...

ARCHIVED : This Practice Note has been archived and is not maintained. This Practice Note addresses the previous CFC regime that applied up to the first accounting period of a CFC beginning on or after 1 January 2013. The note is archived and not kept up to date. For material on related topics under the rules effective from that date, refer to: CFC rules—determining residence of controllers and CFCs and New CFC rules— CFC's territory of residence......

In order to keep reporting fund status, a reporting fund must meet ongoing obligations laid out in Part 3 of the Offshore Funds ( Tax) Regulations 2009, SI 2009/3001 (the Offshore Funds Regulations). These cover the fund’s accounting policy, the duty to compute ‘reportable income’, and the obligation to provide reports and specified information to investors and HMRC. Observing these obligations is considered essential to ensure the reporting fund regime operates as intended. Because offshore funds are otherwise outside HMRC’s jurisdiction (by virtue of being ‘offshore’), the offshore funds legislation equips HMRC with sanctions to deal with any failures to meet these obligations. Where a reporting fund falls short of the stipulated requirements, the aim is that any outcome should be fair and proportionate. Failures are therefore categorised as ‘minor’ or ‘serious’. Where a reporting fund commits a ‘serious’ failure of the...

Offshore employment intermediaries—income tax provisions This Practice Note sets out the income tax rules relevant to offshore employment intermediaries. It includes an outline of the position before and after the amendments brought in by the Finance Act 2014 ( FA 2014), together with practical points to consider. The offshore employment intermediaries regime applies where an offshore intermediary entity is used to arrange the provision of services by UK workers. The rules are primarily designed to ensure that employment taxes— National Insurance contributions ( NICs)—are accounted for when offshore employers engage UK workers who ultimately perform work for companies based in the UK. For the treatment of onshore employment intermediaries, see Practice Notes: Onshore employment intermediaries—income tax provisions and Onshore employment intermediaries—key practical considerations......

The large and public client off-payroll regime This regime generally applies where a public authority or a private sector organisation (other than one that is small or lacks a UK connection) engages a worker via an intermediary, such as a personal service company ( PSC), and where, ignoring that intermediary, the link between the individual and the end client would be one of employment. The large and public client off-payroll regime places the duty to decide if IR35 is applicable on the end client. If the regime applies, the obligation to withhold income tax and National Insurance contributions ( NICs) falls on the fee-payer, meaning the party nearest to the PSC in the contractual chain—this could be the end client where it contracts directly with the PSC, or another intermediary in more complex supply chains. This allocation of...

STOP PRESS On 5 January 2026, the OECD unveiled the Side by Side package, made up of: a new simplified ETR safe harbour; a 12‑month extension to the existing transitional Cb C reporting safe harbour (originally due to end on 31 December 2027); a fresh substance‑based tax incentives ( SBTI) safe harbour, permitting certain ‘qualified tax incentives’ to be treated as an addition to covered taxes; a new side‑by‑side safe harbour ( Sb S safe harbour) for groups whose parent entity is in a jurisdiction that levies a minimum level of taxation on the group’s domestic and overseas operations; and a UPE safe harbour for jurisdictions that meet only the domestic aspect of the Sb S safe harbour eligibility criteria. For more information, see The OECD’s Pillar Two side‑by‑side package (2026): Tax Journal, Issue 1737, 10. In October 2021, the member states of the Organisation for Economic...