Other news in brief

On 11 March 2026, the report stage and third reading for Finance Bill 2025-26 took place in the House of Commons. As expected, the remaining government amendments were passed but no other amendments were made. This completed the House of Commons stages and, for UK GAAP and IFRS purposes, the Finance Bill was then ‘substantively enacted’. The Bill then had its first reading in the House of Lords on 12 March and had all its remaining stages on 17 March. As it is a ‘Money Bill’, this was a formality only - no further changes could be made by the House of Lords. At the time of writing, the parliamentary website is stating that Royal Assent is scheduled for 18 March. As a reminder, the key measures included in the Bill were discussed in the 11 December 2025 edition of Tax Matters Digest.

The National Insurance Contributions (Employer Pensions Contributions) Bill, which provides for a cap from 2029/30 on pension salary sacrifice contributions that attract NIC relief, was amended by the House of Lords at its report stage. These amendments include an increase in the cap from the originally proposed £2,000 a year to £5,000 a year. If implemented, that would materially shift the earnings threshold at which the cap might have an impact from around £40,000 (where sacrificing a typical 5 percent of salary in return for an employer pension contribution would be at the original £2,000 limit) to a far higher figure. At typical 5 percent employee contributions, those earning less than £100,000 would be unaffected by a £5,000 cap. According to ONS data, around 4 percent of UK earners earn more than £100,000 a year. The original HMRC documents stated that 7.7 million people contribute to pensions through pension salary sacrifice and that 3.3 million people would be affected by the original £2,000 threshold. If 4 percent of the 7.7 million who save through pension salary sacrifice earn more than £100,000 a year, it could mean that perhaps around 300,000 people would be affected by this amended £5,000 cap, a substantial reduction to the scale of the impact from the original 3.3 million. A further amendment from the Lords is that the cap would apply per job, so someone with two jobs in a tax year might have an effective cap on pension salary sacrifice that attracts NIC relief of £10,000 in that year. This amendment potentially dilutes the likely tax take even further. We wait to see how the House of Commons responds to these amendments – this is currently scheduled to take place on 23 March 2026. At this stage, the Lords’ amendments reinforce that this remains a live issue.

In 1999, the old Advance Corporation Tax (ACT) regime was abolished and regulations were introduced at the same time to ensure that any unrelieved surplus ACT balances could still be accessed to broadly the same extent had the ACT regime continued. This was achieved through the introduction of ‘shadow ACT’ rules which involved a notional calculation of ACT paid on distributions made after 5 April 1999. 26 years later, the Government’s view is that “the shadow ACT rules have served their purpose to ensure that set-offs were maintained at consistent levels. However, there are still companies with significant balances of unrelieved surplus ACT.” As a consequence, on 4 March 2026, “The Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) (Amendment) Regulations 2026” were published. These regulations amend the shadow ACT provisions and cancel all remaining shadow ACT balances which will allow companies to speed up utilisation of their remaining unrelieved surplus ACT balances. According to the Government this change affects “fewer than 100 companies that continue to report unrelieved surplus ACT balances in their company tax returns”.

On 10 March 2026, HMRC published a consultation on modernising and standardising company tax returns. It looks at proposed timescales for introducing a standardised format for Corporation Tax computations, including the required content, layout and XBRL data tagging. The consultation asks for views on the timeline for moving to the new standardised approach and on the enforcement measures needed to ensure compliance. The Government also plans to change how amendments to company tax returns are submitted by requiring all amendments to be filed online. HMRC are seeking feedback on when this requirement should take effect and the detail of any exemptions that should apply. The consultation is open for comments until 2 June 2026.

The First-tier Tribunal (FTT) decision in Sajedi & Ors has been set aside by the Upper Tribunal for material error of law. The FTT judgment was unusual in that the Tribunal found for the taxpayer on the specific matter appealed, which was whether or not the taxpayer was caught by a change in law in respect of some SDLT planning in relation to the second homes surcharge; but it then found against the taxpayer on the basis of an entirely different point (a challenge to the efficacy of the planning based on the principles in Arrowtown), which was not put forward by HMRC and hence the taxpayer had not been prepared to defend.

In Summer 2025, Revenue Scotland initiated a consultation on the Land and Buildings Transaction Tax (LBTT) treatment of various property investment funds, including CoACS (Co-ownership Authorised Contractual Schemes), PAIFs (Property Authorised Investment Funds) and RIFs (Reserved Investor Funds) which sought opinions on the implications of more closely aligning the treatment of these funds with Stamp Duty Land Tax (SDLT), specifically exploring the potential introduction of an LBTT seeding relief. Seeding relief typically allows for the tax-efficient transfer of property into these investment structures, which is crucial for their initial setup and growth by removing a significant transactional cost. Following this consultation, Revenue Scotland last month published new regulations regarding the LBTT treatment of CoACS which confirm that, from 1 April 2026, the creation, issue, transfer, redemption or cancellation of units in a CoACS will be an exempt transaction for LBTT purposes. However, there has been no announcement regarding plans to introduce an LBTT seeding relief, which would potentially stimulate the Scottish property market. The absence of such relief has arguably created an imbalance between English and Scottish property because investors can currently benefit from SDLT relief when transferring property into similar funds in England, potentially deterring investment in Scottish property. This disparity can place Scottish real estate at a competitive disadvantage, making it less attractive for institutional investors and fund managers looking to establish new property investment vehicles. The property industry will likely continue to advocate for the introduction of such a relief in Scotland, recognising its potential to unlock significant investment and foster growth in the Scottish commercial property sector.