Other news in brief

On 21 May 2025, HMRC published two new online calculators to help taxpayers in the creative industries. The first is designed to work out how much creative industry tax relief or expenditure credits a business may get for its production and where to claim it on the Corporation Tax return. The second is designed to work out how to redeem the value of expenditure credits and how much payable credit can be claimed. These tools are likely to be of most use to small start-ups to provide an estimate of the potential benefit of making a claim, but will be of limited value to larger experienced taxpayers as they do not provide help on what productions qualify or on completing additional information forms (AIFs).

The General Court has made Orders in several cases that were stayed behind Cases T‑363/19 United Kingdom v Commission, and T‑456/19 ITV v Commission. The Orders made in the stayed cases declare that there is no longer any need for the General Court to adjudicate on the action, in view of the fact that the EC’s decision has been definitively annulled. Readers will recall that late last year HM Treasury issued The Controlled Foreign Companies (Reversal of State Aid Recovery) Regulations 2024 (S.I. 2024/1307), which came into force on 31 December 2024 and provide for the repayment of the 'State Aid' and interest paid by affected companies. HMRC have also issued guidance on these Regulations to affected taxpayers in which they propose to pay interest to taxpayers only on the 'State Aid' element and on a simple basis only. It will be important for those affected to consider whether any reversal notice issued by HMRC (or adjustment) achieves the objective set out in the Regulations of putting affected companies back in the position they would have been in. In particular, and depending on the amounts repayable under the notice, those affected may well wish to explore whether compound interest should be paid by HMRC. The KPMG Law Tax Disputes team can assist with consideration of such matters for affected taxpayers.

The Government will legislate in the next Finance Act to let subsisting Enterprise Management Incentive (EMI) and Company Share Option Plan (CSOP) options be amended, whilst retaining their tax advantages, to allow their exercise if the company’s shares are traded on a Private Intermittent Securities and Capital Exchange System (PISCES) platform. This development was raised as a possibility at the Spring Statement, and the confirmatory announcement states that the relevant legislation will have retrospective effect. This will allow tax advantaged exercises of CSOP and EMI options later this year when trading on PISCES platforms is expected to begin. However, as discussed in HMRC’s updated technical note, amending subsisting CSOP or EMI options can in certain circumstances remove their tax-advantages. Employers are therefore advised to await the publication of specific HMRC guidance, which is expected by the end of July 2025, before amending CSOP or EMI options in anticipation of PISCES trading events.

HMRC have published three pieces of research they commissioned on key workforce issues. These cover employers’ attitudes to salary sacrifice for pensions, which looks at the experiences, motivations, and attitudes of employers towards using pension salary sacrifice arrangements; Benefits in Kind offered and expenses reimbursed by employers, which considers current and possible future use of benefits in kind and expenses; and employment status for employment rights purposes, which also discusses employment status for tax. As these studies were conducted by third party researchers, they do not necessarily reflect HMRC’s views. However, they do indicate areas of interest to HMRC.

HMRC have also published a qualitative evaluation of Employee Ownership Trusts (EOT) which was carried out by Ipsos to determine the extent to which availability of tax reliefs influences decision making of company owners to transition their company to employee ownership. Of the three tax reliefs considered, 100 percent capital gains tax relief for company owners who transfer their company to an EOT was reported by interviewees as having the most impact. Tax free employee bonuses were viewed as a ‘nice to have’, and inheritance tax (IHT) relief on the transfer of assets to the EOT/exemption from the IHT charges that might otherwise apply to trusts was considered to be the least important of the three. The research also found that transitioning to an EOT model helped to maintain employee engagement and build on positive company cultures and values (where these had already been established) and that some considered that the EOT model provided a form of stability while a company owner gradually stepped away, helping staff retention were there to be a more immediate change of ownership. It also found that transitioning to an EOT model was reported to have a positive impact on employee engagement.

On 16 May 2025, the National Audit Office (NAO) published a report titled ‘Collecting the right tax from wealthy individuals’ which highlights a significant increase in yield by HMRC from their compliance activity in this area. It is also worth noting that HMRC received additional funding in Autumn Budget 2024 and Spring Statement 2025 which included funding to tackle wealthy offshore non-compliance and fraud by wealthy taxpayers. It is clear that this remains an important area of focus for HMRC looking forward.