Tax Matters Digest

We have quite the bumper issue this week. Our spotlight article highlights a new consultation on the Uncertain Tax Treatment (UTT) regime which proposes significant changes including broadening the scope of the regime to include individual taxpayers and trusts and widening the taxes covered. Perhaps most interestingly, the Government is also looking to introduce a new trigger which would require notification of legal interpretation uncertainties. Closing the tax gap is a key plank of government tax policy and we have known for some time that there would be an increased focus on the element of the tax gap that represents legal interpretation (it was mentioned in HMRC’s Transformation Roadmap issued in July 2025).

In their consultation document on UTT, HMRC acknowledge that transfer pricing (TP) inherently involves a degree of judgement and this is underlined by the latest TP and diverted profits tax statistics. TP yield hit an all-time high in FY24-25 of £3.4 billion which was (a whopping) £1.6 billion increase on the prior year. TP yield varies year to year, but the yield for FY24-25 is exceptional and represents a much higher yield per settled enquiry than seen in the last decade. Our article analyses the trends, what might come next, and practical steps multinationals can take to make sure they are compliant and well-placed to deal with TP enquiries.

Our third article discusses the Tax Agent Registration regime which will require tax agents to register with HMRC from 18 May 2026 if they want to interact with HMRC in relation to a client’s tax affairs. The regime is part of a wider government initiative to raise standards in the tax market and ensure that advisers and agents interacting with HMRC meet minimum standards. It would be easy to assume that only traditional tax advisers are within scope, but in fact the legislation as currently drafted has the capacity to impact on some in-house tax teams, law firms, financial institutions, asset managers and family offices.

The situation in the Middle East has meant that some individuals are returning to the UK, whilst others may be in the UK for longer than expected because they are not able to travel as originally planned. This may have unintended consequences for their UK tax residence position under the Statutory Residence Test (SRT) and our next article provides a reminder of the SRT’s 'exceptional circumstances' rules, how they may apply to individuals affected by the Middle East crisis, and practical steps that affected individuals may wish to consider.

We then move on to a couple of case reviews. Firstly, in Muller UK and Ireland Group LLP, the Court of Appeal has upheld the previous decisions regarding the deductibility for corporate members of the amortisation of intangible assets held by an LLP. The case serves as a valuable reminder that the tax rules for transactions including LLPs and limited companies can be complex and require close attention to get the tax position correct.

Secondly, we take a look at the Upper Tribunal decision in Putney Power which clarifies the approach to identifying when a trade commences. Whilst agreeing with the First-tier Tribunal that trade had not commenced within the relevant time limits for the purposes of the EIS legislation, it disagreed on the reasoning. The decision stands as a warning - relevant to factual questions more broadly and not just to the commencement of trade – of the dangers of seeking to answer factual questions by simplistically seeking to equate or differentiate the fact pattern with that in earlier cases.

At Budget 2025, HM Treasury issued a Call for Evidence seeking views on how tax levers can be used to incentivise greater investment, help companies attract talent, and unlock the UK’s scale-up potential. In our article we summarise the Call for Evidence and our response highlighting areas where we think improvements could be made to better support entrepreneurs. And speaking of employee share plans, this is your friendly reminder that employers must file their 2025/26 employment-related securities returns on or before 6 July 2026. Our next article tells you what you need to consider as you prepare for reporting.

In February’s International Tax Review published in Tax Journal, Tim Sarson, our head of tax policy in the UK, provides a round-up of tax developments across the globe which highlight how different countries are using tax levers to address fiscal challenges including France, India, the Netherlands, Hong Kong and the EU. 

In Other News in Brief we provide an update on the Finance Bill (which, at the time of writing, is scheduled for Royal Assent on 18 March) and highlight a few other items: House of Lords amendments to the cap on pension salary sacrifice arrangements announced at Budget 2025; regulations to help companies with remaining unrelieved surplus ACT balances; a consultation on modernising and standardising company tax returns; a First-tier Tribunal SDLT decision that has been set aside by the Upper Tribunal (Sajedi & Ors) for material error of law; and regulations on the Scottish LBTT treatment of various property investment funds.

As always, we close out this edition with 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.