Tax Matters Digest

HMRC have now updated the Capital Allowances manual in respect of the new 40 percent first year allowance that was announced in last November’s Budget. Our spotlight article talks you through the key points in the new guidance including, amongst other things, how to deal with changes in use of an asset, mixed use of an asset, overseas leasing and sub-leasing issues.

Who remembers 20 December 2021? Our fingers were poised to activate our festive out of offices, when the OECD slapped them away and dropped a little something called the GloBE model rules in our inboxes. Time flies when you’re enjoying yourself…. more than four years on, our Formula 1 themed guide provides a practical checklist to ensure you are more Lewis Hamilton than Dick Dastardly as we race towards the first major Pillar Two compliance filing for calendar year ends, which is now less than five months away.

We are also racing towards the implementation of UK CBAM. Our next article looks at the latest tranche of draft legislation, which provides more insight into how HMRC intend to manage this new indirect tax ahead of go-live later this year.

The UK has a significant trading relationship with India, and there are a large number of workers on assignment between our two countries every year; so it is exciting news that (following negotiations that started in 2022) the UK and India signed a Social Security Agreement on 10 February 2026. Our next article summarises the key features of the agreement.

Autumn Budget 2024 announced mandatory payrolling of benefits in kind, albeit the original start date was subsequently pushed back a year until April 2027. Employers should read our next article to find out what they need to do now to prepare for this major change.

Budget 2025 announced several changes to the Enterprise Management Incentive (EMI) regime that will become effective from 6 April 2026. Our next article focusses on how some companies may be able to benefit from the extension to the tax qualifying period for EMI options from 10 to 15 years.

The National Minimum Wage (NMW) was introduced in the UK in 1999, and whilst employers understand they need to pay workers a minimum rate, many still fall foul of the rules inadvertently through working practices on the ground. HMRC’s NMW enforcement team have targeted their activities by region and have confirmed their next area of focus will be the West Midlands. Our next article looks at what employers with operations in the region need to know and how they can prepare for a compliance review.

We pivot from the West Midlands to Scotland and explore the First-tier Tribunal’s decision in the Bredin case that upheld strict Land and Buildings Transaction Tax deadlines, despite perceived unfairness. Bredin is not unique and is a cautionary tale to all taxpayers that statutory time limits in property tax regimes will be strictly enforced.

Sticking with the theme of property taxes, our next article examines new Stamp Duty Land Tax obligations for private renters in England and Northern Ireland as a result of the new Renters’ Rights Act that becomes law on 1 May 2026. Although the financial cost for taxpayers is in most cases expected to be small, the compliance obligations will be onerous.

We then bring you Tim Sarson’s International Tax Review for January, which summarises the key features of the OECD Pillar Two Side-by-Side package and takes a look ahead at what to expect from international tax policy in 2026.

In Other News in Brief we cover new HMRC guidelines on how to share group structure information; OECD updates in relation to ‘Amount B’; changes to Welsh Land Transaction Tax; KPMG’s latest European Economic Outlook; and the first instalment of KPMG’s Global Mobility Services team’s ‘see it differently’ series. We close out this edition as usual 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.

Stefanie Redmond
Senior Manager, Tax Policy
KPMG in the UK