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      Tax Matters Digest: 22 January 2026 Edition

      To go straight to the articles in the latest edition please scroll down and expand the section/s below that are of interest to you. For a preview of these articles, read the introduction to the latest edition from Sharon Baynham here:

      All eyes are focussed on Davos this week where global movers and shakers have gathered to do some moving and shaking. Every inch of the tiny Alpine village is converted into valuable meeting space. I read that one year a global bank held their meetings in a doctor’s office where there was an actual skeleton in the closet. I was thinking I wouldn’t mind going – not for the skeletons, but because Katy Perry seems to have got an entry pass this year. But then I looked at the price of wine during WEF week and decided I would prefer to stay home and write this introduction. I’ll leave the great and the good to sort the world out without me.

      There has been a lot of activity around Pillar Two over the last few weeks as the documents issued by the OECD on 5 January have been dissected and digested. For our spotlight article in this edition, we are providing a summary of materials and resources on the ‘Side-by-Side’ approach, including links to our own detailed commentary, webcasts (available on playback) from KPMG and the OECD, and our EU Tax Centre’s insights on the implications for implementation across EU member states. The article also discusses next steps and expected timescales for the implementation process in the UK and what actions affected groups should be considering.

      Sharon Baynham

      Director, Tax Policy

      KPMG in the UK

      Our next two articles focus on the Scottish Budget that took place on 13 January. The first article details the changes announced as they affect businesses, highlighting changes to non-domestic (business) rates, Scottish Landfill Tax and the Scottish Aggregates Tax which will replace the Aggregates Levy, Air Departure Tax and the Scottish Building Safety Levy. We also include some general considerations for employers with Scottish taxpayers in their workforce.

      The second article on the Scottish Budget deals with the Budget changes for individuals and those with Scottish interests. The article sets out the Scottish income tax bands and thresholds as well as highlighting other developments including Scotland’s response to England’s new High Value Council Tax Surcharge, as well as plans for a Private Jet Supplement.

      We then turn our attention to HMRC’s transfer pricing Guidelines for Compliance where new content has been added on value chain analysis and offshore procurement hubs. Our article discusses this new content and also mentions a survey that HMRC are running to see what businesses think of the guidance.

      Our final in-depth article this week reminds businesses with Employer Financed Retirement Benefit Schemes of their compliance obligations in the runup to the end of January.

      Our Other News in Brief this week includes updates on the progress of the Finance Bill, the publication of the Final Budget in Wales, new tax treaties with Peru, Romania, Andorra and Portugal, and a case update from the Indian Supreme Court where the court decided that Indian General Anti Avoidance Rules could override treaty provisions.

      We close out this edition with our usual Indirect Tax Weekly Talking Points which has a round-up of all things VAT, and Week in Tax covering key tax developments from around the world.



      Tax matters for business

      Articles of interest to businesses
      group

      Further details on the OECD Pillar Two ‘Side-by-Side’ package

      This article sets out where readers can find help on the ‘Side-by-Side’ package recently released by the Inclusive Framework on BEPS

      Scottish Budget 2026/27 – measures for businesses and employers

      Key points from this year’s devolved Scottish Budget for businesses and employers

      New content added to HMRC Transfer Pricing Guidelines for Compliance

      HMRC have added new content on value chain analysis and offshore procurement hubs to GfC7: Common Risks in Transfer Pricing Approaches

      Indirect Tax Weekly Talking Points – 14 January 2026

      This week’s edition discusses various UK VAT cases including Hotel La Tour, plus news updates on HMRC briefs and EU customs duty

      Indirect Tax Weekly Talking Points – 21 January 2026

      This week’s edition looks at an AG’s Opinion on the interaction between VAT and transfer pricing and two FTT decisions on zero-rating




      Tax matters for employers

      Articles of interest to employers
      conversation

      Scottish Budget 2026/27 – measures for businesses and employers

      Key points from this year’s devolved Scottish Budget for businesses and employers

      Employer Financed Retirement Benefit Schemes (EFRBS) reporting

      New EFRBS must be registered with HMRC by 31 January – do you have anything to report?




      Tax matters for Individuals

      Articles of interest to individuals
      conversation

      Scottish Budget 2026/27 – measures for individuals

      What are the key personal tax implications of this month’s devolved Scottish Budget?




      Other news in brief

      • Finance Bill update
      • Welsh Final Budget published
      • Update on new tax treaties with Peru, Romania, Andorra and Portugal
      • Businesses accessing tax treaties with India will be interested in the Indian Supreme Court decision in Tiger Global

      Our tax insights

      View our previous editions of Tax Matters Digest


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