Hello,
There’s a lot to catch up on this week, with a new Agent Update, Employer Bulletin, two Revenue & Customs Briefs, estimated tax gap figures for 2023-24, and much more, including several decisions from the tax tribunals.
HMRC have estimated the 2023-24 UK tax gap at £46.8 billion. Although this is the highest it has ever been in cash terms, as a percentage of total theoretical tax liabilities, it has fallen from 5.6% to 5.3%.
The largest component of the tax gap arises from small businesses, at 60%, with only 5% of the tax gap being attributable to the wealthy. The primary cause of tax loss is when taxpayers make errors or fail to take reasonable care. This amounts to some 46%, and is undoubtedly indicative of the complexities of the UK tax system.
Of course, the cost of tax compliance failures is not only felt by the Exchequer. One of the cases we cover this week, Conchri Investments Limited, serves as a useful reminder of the penalties that can arise for failing to submit Annual Tax on Enveloped Dwellings (ATED) returns on time.
As the First Tier Tribunal pointed out, HMRC does not have an obligation to notify a taxpayer that they may be within the ATED regime and, as such, ATED reporting obligations are commonly overlooked. It is important to ensure that frequent reviews of client affairs are undertaken to minimise such a compliance risk.
This is a busy time of year for those working in employment taxes, as various reporting deadlines draw near, such as those for Employment-Related Securities, Benefits In Kind and PAYE Settlement Agreements. This makes the publication of HMRC’s latest Employer Bulletin both timely and essential reading.
More news, cases, and updates below.
The Ross Martin Tax Team
Online PRACTICAL tax resources for accountants and tax advisers BY accountants and tax advisers.
Quick News
Agent Update 132: June 2025
HMRC have published their Agent Update for June 2025. We have summarised the key content with links to our detailed guidance on the topics covered, including an update on fraudulent activity on HMRC's tax accounts, written-off directors' loans and changes in the reporting requirements for cryptoassets.
Small businesses account for 60% of missing taxes
HMRC have published 'Measuring Tax Gaps 2025', which says that small businesses failed to pay 40% of the corporation taxes that they owed in 2023-24. Overall, the tax gap estimate (the difference between what tax is expected to be paid and actually paid) was 5.3% for 2023-24.
Employer Bulletin: June 2025
HMRC have published their Employer Bulletin for June 2025. We have summarised the key content for you, which links to our detailed guidance on the topics covered.
HMRC issuing incorrect SA302 calculations (update)
The Chartered Institute of Taxation (CIOT) has highlighted issues with HMRC's 2024-25 Self Assessment calculations. Several individuals have reported that Class 2 National Insurance Contributions (NICs) are being incorrectly included on SA302 tax calculations. UPDATE June 2025: HMRC provided an update on the issue, to the CIOT.
Spotlight 71 warns agency workers about umbrella companies
HMRC have released Spotlight 71: 'Warning for agency workers and contractors who are moved between umbrella companies'. This Spotlight highlights signs that agency workers and contractors should be aware of and that may indicate that the umbrella company they are engaged with is operating a tax avoidance scheme.
R&C Brief 3 clarifies VAT position of charitable events
Following the Upper Tribunal decision in Yorkshire Agricultural Society v HMRC [2025] UKUT 00004, HMRC have published 'Revenue & Customs Brief 3 (2025): VAT treatment of income received from charity fundraising events'.
R&C Brief 4: VAT recovery on pension fund management
HMRC have published 'Revenue and Customs Brief 4 (2025): VAT on the management of pension funds' which announces a further change to HMRC's policy on the recovery of VAT incurred on the management of pension funds.
One-to-many letters: Tracker
HMRC's latest one-to-many letter targets individuals who, between April 2019 and April 2023, received a director’s loan that has been written off or released but may not have been declared as income.
Tax Cases
No reasonable excuse for late filing of ATED returns
In Conchri Investments Limited v HMRC [2025] TC09540, the First Tier Tribunal (FTT) found no reasonable excuse or special circumstances to justify reducing £15,700 of penalties charged for late Annual Tax on Enveloped Dwellings (ATED) return filings.
University joint venture was VAT-exempt
In Solent Pathway Campus Limited v HMRC [2025] TC09536, the First Tier Tribunal (FTT) found that a joint venture between Solent University and a third-party course provider qualified for VAT exemption as an ‘eligible body’.
FTT sympathises for upholding discovery assessments after Apostle misled taxpayer
In Dennis Lucas v HMRC [2025] TC09550, the First Tier Tribunal (FTT) found that discovery assessments issued to a taxpayer who had been misled by a repayment claims company were valid.
Editor's Choice
Associated companies & tests for control
What is an associated company? What are the tax effects of associated companies? How do the control tests work? Examples of associated companies. What are the rules for indirect control?
IHT: Pre-Owned Asset Tax (POAT)
What is Pre-Owned Asset Tax (POAT)? When does it apply? Are there any exclusions or exemptions?
Guides & Updates
Self-employed
Tax risk review
This is a tax risk review checklist for unincorporated businesses. Agents should use this to build a risk profile of their clients.
Compare software for Making Tax Digital for Income Tax
UPDATE: What software is available for MTD for Income Tax? What's the most suitable software I can use? Which software does HMRC list as working for MTD for Income Tax? What to consider before choosing software?
MTD: Toolkit for accountants
UPDATE: What is the current timetable for Making Tax Digital (MTD)? When will MTD for Income Tax become mandatory? How will it work? Which clients will be excluded? What planning needs to be undertaken?
Directors & Companies
Company Tax: What's New? FY2025
NEW: This Corporation Tax update takes you through key new measures and changes that apply from 1 April 2025, also referred to as FY2025.
Private Intermittent Securities and Capital Exchange System (PISCES)
UPDATE: What is the Private Intermittent Securities and Capital Exchange System (PISCES)? What are the tax implications of trading shares on PISCES? What impact will there be for share schemes?
Employers
Loans: Employment-related (beneficial loans)
UPDATE: What is a beneficial loan? What are the tax and benefit-in-kind implications? Which loans are exempt? How is the value of the benefit calculated? How is the beneficial loan reported? What happens if the loan is written off?
Mandatory payrolling of benefits from 2027: Briefing
The Government has announced that the mandatory payrolling of Benefits In Kind and taxable employment expenses will not come into force until 6 April 2027. This replaces the earlier date of 6 April 2026, allowing employers more time to prepare for the changes.
Private Client & Estate Planning
Investment bonds & tax
UPDATE: How are investment bonds taxed? What is an investment bond? What is a chargeable event gain and how is it calculated? How do notional tax credits work? How is top-slicing relief calculated? What is deficiency relief?
Capital Allowances
Full expensing & First Year Allowances
UPDATE: What is full expensing? When does it apply and what is the rate of allowance? How are disposals of full expensing assets dealt with? What assets qualify for the 50% First Year Allowance (FYA)? How do I deal with disposals of 50% FYA assets? How do I make a claim?
Fixtures: Overview
UPDATE: What are fixtures? How do I claim lost or unclaimed fixtures? When must fixtures be pooled? What is the fixed value requirement?
VAT
Assessments: Best judgment & time limits
UPDATE: What is a 'best judgment' assessment for VAT? When can HMRC raise one? What are your rights of appeal? How do you displace a best judgment assessment? What are the time limits for a VAT assessment?
Deregistration
UPDATE: When do I have to deregister for VAT? When can I voluntarily deregister? What penalties might HMRC issue if I am late notifying them of mandatory deregistration?
Online Marketplaces: Selling goods in the UK
UPDATE: When do you have to register for UK VAT? When is UK VAT payable? What amount is VAT payable on? What information do you have to give the marketplace provider? What will it do with that information?
Flat rate scheme: Farmers
What is the agricultural Flat Rate Scheme? Who can use it? What are the conditions? What is the benefit? What about non-farming income?
Tax Tools & Calculators
Tax tools & calculators
We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes.
Calendar of tax deadlines and new tax measures
This is a freeview 'At a glance' rolling calendar of common recurring tax deadlines, new tax measures and other tax-significant events.
CPD
Recent webinars include:
- Monthly Tax Update - June 2025
- Practice Insight - June 2025 (free)
- Monthly Tax Update - May 2025
- Practice Insight - May 2025 (free)
- Making Tax Digital for Income Tax - Roadmap to April 2026
Need Tax Support?
Virtual Tax Partner© Support
Have a tax query? Need a second option? Open a ticket and ask a question. A team of tax experts with a wide range of expertise: covering direct and indirect tax, as well as accounting, R&D claims, reorganisations and much more.
Missed the Last Tax Update?
Ross Martin Tax: SME Tax News 12 June 2025
- Treasury's tax policy making principles
- HMRC's handling of phishing incident 'unacceptable'
- Government feedback on taxation of carried interest
- Failure to claim Multiple Dwellings Relief a 'mistake'
- Income from jointly owned property taxable on one owner
- Strictly Ballroom means standard-rated for VAT
- Cryptoasset Reporting Framework (CARF)
- IHT: Pre-owned Asset Tax (POAT)
- Sole trader v. limited company: Tax differences & savings (2025/26)
- Divorce & Separation: Toolkit ...More
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