Tax Matters Digest

Our next article looks at the draft legislation relating to the Advance Tax Certainty Service which offers clearances on various taxes for qualifying investments. With its high gateway test the service is unlikely to be heavily used in the short term, but the Government has promised a review after 12 months and so the hope is that once the regime is in place and running the qualification criteria may be flexed to bring more investment projects into scope. 

In the international tax space, there are three key amendments to our existing international rules which are covered in our next article. The UK’s transfer pricing rules are being amended to align more closely with international standards, simplify existing rules and address legislative weaknesses. Changes are also being made to the UK’s permanent establishment rules which have fallen out of step with the OECD model. The third change is to introduce a new charging provision to assess unassessed transfer pricing profits to corporation tax at a higher rate which will replace the existing Diverted Profits Tax rules for period beginning on or after 1 January 2026. Our article covers the key changes.

Our next article discusses a three-year relief from the standard 0.5 percent stamp duty reserve tax charge on agreements to transfer securities when a company first lists its shares on a UK regulated market. This was introduced with immediate effect at the recent Autumn Budget.

At Autumn Budget 2024, the Government confirmed the introduction of a new carbon border adjustment mechanism (CBAM) which will place a carbon price on emissions embodied in certain goods which are imported into the UK. The purpose of the rules is to ensure that highly traded carbon intensive imported goods face a comparable carbon price to that paid by domestic manufacturers. Our article sets out the key provisions .

The Finance Bill also includes draft legislation to improve non-compliance within umbrella companies. The changes, which have been consulted on, come into effect from 6 April 2026. Under the new rules recruitment agencies will be jointly and severally liable for those umbrella companies’ PAYE obligations and, in some situations, underpayments can also sit with the end client. Our article summarises the key points of the legislation and sets out practical steps businesses can take to prepare for the changes.

Our final article on the Finance Bill gives a summary of some of the other measures that are included within the Finance Bill. For businesses this includes amendments to the Pillar Two rules, Corporate Interest Restriction rules and the R&D regime. For individuals the measures are primarily to do with Inheritance Tax and Capital Gains Tax changes, and there are also a few measures that potentially impact businesses and individuals including the new regime for carried interest, share exchanges and reconstructions, crypto-asset reporting and some anti-avoidance provisions.

We also have a few developments in Other News in Brief that are not related to the Finance Bill. The Bill to bring in the salary sacrifice pension changes announced at the Budget has been published, HMRC have published the latest in their Guidelines for Compliance series (GfC15) which provides help for those operating or intending to operate in investment zones, regulations have been published which change the corporation tax restitution interest rules to clarify when the 45 percent tax levied on certain payments of court awarded interest apply, HM Treasury has pushed out the date to implement Pillar One to 2027, the First-tier Tribunal has ruled that the acquisition of a country estate should be treated as a mixed-use transaction, there is an update on new tax treaties with Peru, Romania, Andorra and Portugal and the UK has announced its intention to implement the OECD’s framework for the automatic exchange of information on immovable property. Other News in Brief also includes a link to our latest economic outlook which looks at forecasts for growth, consumer spending and inflation among other things. And we also include our usual Indirect Tax Weekly Talking Points and one Week in Tax summary covering key tax developments from around the world.

And with that we close the book on 2025. It’s been quite the rollercoaster ride, especially in recent months. So, we wish you all a Merry Christmas and a Happy New Year and we hope that you will get some good R&R time and come back to read Tax Matters Digest in 2026!