Hello,
This week’s hot topics include the introduction of a new service to collect the High Income Child Benefit Charge (HICBC) via PAYE, the timing of the next Scottish and Welsh Budgets, and a tool to check whether projects qualify for Research and Development (R&D) tax relief.
A new digital service, which was announced earlier this year, has now gone live. This will enable employees subject to the HICBC to have their liability collected via PAYE, rather than self-assessment. In 2022-23, approximately 440,000 individuals were liable to the HICBC, and it is hoped this will simplify reporting for a significant number of individuals going forward.
HMRC are continuing their increased use of one-to-many 'nudge' letters, now focusing on companies that have elected into the Patent Box regime. This is a less well-known tax relief, with statistics published last week revealing that in 2023-24, only 1,650 companies had elected in. Despite that, some £1.98bn of relief was claimed, demonstrating how valuable the regime can be to those who qualify. Our Patent Box guide can be found in Editor's Choice.
Turning to the Tribunals, this week the First Tier Tribunal sought to answer the question on everyone’s lips: is nitrous oxide a food for VAT purposes? Unfortunately for the taxpayer, it wasn’t. This resulted in a VAT liability of £1.5m for a 12-month period, serving up a reminder of the benefit of tax advice, up-front.
Continuing with cases, what happens when two previous Upper Tribunal (UT) decisions contradict each other? That was the problem faced by the UT in Tajinder Pawar. This is the latest instalment of case law relating to late appeals: do read on below to see how it played out.
Finally, rossmartin.co.uk subscribers should keep their eyes peeled for some exciting news on CPD in the coming weeks, as we look forward to making a big announcement.
More news and updates below.
The rossmartin.co.uk tax team
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Quick News
Paying the High Income Child Benefit Charge via PAYE
HMRC have launched a new service allowing employees liable for the High Income Child Benefit Charge (HICBC) to pay the charge through PAYE, thereby removing the requirement to report via a Self Assessment return.
Scottish and Welsh Budget dates
When are the Scottish and Welsh Budgets likely to be held? An update on devolved taxes.
New R&D tool and R&D statistics 2023-24
HMRC have released a new tool to check if a project includes activities that qualify as Research and Development (R&D) for tax purposes. The launch of the new tool comes in the same week that HMRC published R&D statistics for the 2023-24 tax year.
One-to-many letters: Tracker
HMRC's latest one-to-many 'nudge' letter targets companies that have elected into Patent Box.
Tax Cases
UT denies application for late appeal, despite FTT errors
In Tajinder Pawar v HMRC [2025] UKUT 309 (TCC), the Upper Tribunal (UT) found that the First Tier Tribunal (FTT) had made an error of law when applying the Martland test. When considering a late appeal and following the approach in Medpro, the need to comply with time limits should not have been considered in the third stage of Martland.
Culinary nitrous oxide was not a food for VAT
In Telamara Ltd v HMRC [2025] TC09646, the First Tier Tribunal (FTT) found that nitrous oxide (N2O) for culinary use was not food of a kind for human consumption. It was therefore standard-rated for VAT.
Editor's Choice
Patent Box
What is the Patent Box regime? When does it apply? What are the benefits?
Appeals: Late
When can you make a late tax appeal? What conditions must be met?
Guides & Updates
Self-employed
Cash or accruals accounting toolkit
Unincorporated businesses can elect to use one of two different methods of accounting for tax: simpler accounting (cash basis) or accruals basis accounting.
Wages: Spouse or family
Can I employ family members? Can I employ my children? Will the costs be allowable? What needs to be considered?
Directors & Companies
Corporation Tax instalment payments
UPDATE: When does Corporation Tax (CT) have to be paid by instalments? What are the rules and deadlines?
Directors' loan accounts: Toolkit (subscribers)
What is the tax treatment for an overdrawn director's loan account? What are the consequences of an outstanding loan to a participator?
Employers
EMI: Enterprise Management Incentive Scheme
What is the Enterprise Management Incentive (EMI) scheme? What's the difference between EMI and an unapproved share scheme?
Broadband
Can home-workers benefit from employer-provided broadband? What tax relief is available? How is it calculated?
Private Client & Estate Planning
Cryptoassets: How are Bitcoin, cryptocurrencies or cryptoassets taxed in the UK?
How do you tax Bitcoin? Are cryptocurrency or cryptoasset gains or profits, taxable? Can you obtain tax relief if you make losses on Bitcoin? Gains on transactions in cryptoassets are potentially taxable in the same way as other investments.
Interest: Peer-to-peer lending
What is the tax treatment of interest received on peer-to-peer loans by individual lenders?
Capital Allowances
Short-life assets
What is a short-life asset? How to plan for short-life assets, what can be included and what are the exceptions?
Land & Property
Investment Zones
UPDATE: What is an Investment Zone? Where are Investment Zones located? What are the tax advantages of running a business from an Investment Zone?
Overseas & Residence
Business Investment Relief (BIR)
Business Investment Relief (BIR) is a relief for formerly non-UK domiciled individuals, designed to encourage them to remit funds to invest in UK businesses. The abolition of the non-domicile regime has brought changes to BIR for both existing and future investments. Ultimately, the relief will cease from 5 April 2028.
Penalties & Compliance
Direct Recovery of Debts (enforcement by deduction from accounts)
UPDATE: When can HMRC recover debts directly from persistent non-payers? What safeguards are in place for taxpayers?
Digital Platform Reporting
UPDATE: What is digital platform reporting? What is a digital platform? What are the digital platform reporting obligations? Who is excluded from digital platform reporting?
VAT
Input VAT: What constitutes a valid claim (& VAT invoice)?
What is Input VAT? Who can claim it? What is needed for a valid claim? What needs to be included on a VAT invoice and can you make a claim without one?
Health and welfare: VAT
When do reduced rating, zero-rating and VAT exemption apply to services relating to medical care, health and welfare? What are the rules?
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 and upcoming webinars include:
- Practice Insight - October 2025 (free)
- Monthly Tax Update - September 2025
- Practice Insight - September 2025 (free)
- Monthly Tax Update - July 2025
- Practice Insight - July 2025 (free)
- Making Tax Digital for Income Tax - Roadmap to April 2026
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- Agent Update 135: September 2025
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