Hello,
It has been another busy week, with cases and updates spanning VAT, Inheritance Tax (IHT), travel and subsistence expenses, the use of multiple agents by taxpayers and HMRC’s latest Spotlight on property business arrangements involving hybrid partnerships and indemnities.
All three cases we summarise this week warrant reading, each for different reasons.
In Clearwater Hampers Limited v HMRC, the First Tier Tribunal (FTT) made several robust comments concerning HMRC’s technical arguments, which had been based on VAT notices. The FTT considered it ‘disappointing’ that HMRC had relied on their own guidance as though it were law, not only when it was not, but also when it did not accurately reflect the law. This is no doubt an issue that many have faced in practice.
The case of Mr Nwaneri v HMRC demonstrates the importance of precision and accurate record-keeping. Here, the taxpayer had claimed travel and subsistence expenses against employment income based on impossible assumptions, such as working for more than seven days per week, and mileage which exceeded the vehicle’s MOT records by 30,000 miles. Unsurprisingly, the FTT upheld HMRC's deliberate inaccuracy penalties. There is an important technical point in this case: even accurate expenses would not have been allowable because the taxpayer worked through an employment intermediary. This meant the travel to each engagement was ordinary commuting.
Jonathan Wood v HMRC is also worthy of mention, not least as it considers normal gifts from income and when a transfer is intended to confer a gratuitous benefit. Here, an individual made donations to various leave-EU campaigns, which ultimately resulted in a lifetime IHT liability. This is an outcome many taxpayers may not have expected.
In other news, HMRC have published Revenue and Customs Brief 3 (2026) in response to the Court of Appeal’s (CoA’s) decision in HMRC v Colchester Institute Corporation, which related to the VAT treatment of public monies received by further education institutions to fund the provision of free education to eligible students. HMRC have confirmed that they will not be appealing the CoA’s decision.
More news and updates below, including two new guides for subscribers detailing what's new with both capital allowances and Welsh taxes in 2026-27.
Online PRACTICAL tax resources for accountants and tax advisers BY accountants and tax advisers.
Quick News
Spotlight 63a: Property business arrangements involving hybrid partnerships and indemnities
HMRC have published Tax Avoidance Spotlight 63a: 'Property business arrangements involving hybrid partnerships and indemnities'.
Taxpayers find benefits of multiple agents hard to list
HMRC have published the research paper, 'Research to understand customers’ views on tax adviser authorisation'. It found that most customers reported using authorised tax advisers for three or more services, highlighting the complexity of the tax system. Surprisingly, only about half of the respondents could list the benefits of using multiple agents, but more could list drawbacks.
R&C Brief 3 (2026) on VAT and public funds for further education institutions
HMRC have published 'Revenue & Customs Brief 3 (2026): VAT treatment of certain public funds received by further education institutions' in response to the Court of Appeal (CoA) ruling in HMRC v Colchester Institute Corporation [2026] EWCA Civ 363.
One-to-many letters: Tracker
HMRC's latest one-to-many 'nudge' letters target individuals who may be affected by the abolition of the 'non-dom' regime, and businesses that engage 'behind camera' workers.
Tax Cases
Gift hampers proved to be basket case for HMRC
In Clearwater Hampers Limited v HMRC [2026] TC09843, the First Tier Tribunal (FTT) found that lidded wicker baskets supplied as part of a gift hamper were, for VAT purposes, ancillary to the food and drink supplied. They were not a separate standard-rated supply.
Political donations were IHT transfers of value
In Jonathan Wood v HMRC [2026] TC09849, the First Tier Tribunal (FTT) found that payments made to various Brexit leave campaigns were intended to confer a gratuitous benefit and were therefore 'transfers of value' for Inheritance Tax (IHT) purposes.
Even NHS doctors can't work nine-day weeks
In Mr Nwaneri v HMRC [2026] TC09844, the First Tier Tribunal (FTT) found that Mr Nwaneri was not entitled to deduct travel and subsistence expenses claimed in his Self Assessment returns and that inaccuracies in those returns were deliberate, such that HMRC's amendments and penalty assessments were upheld.
Editor's Choice
This week's Editor's Choice was selected by Andrew Symons. You can meet our team of editors and writers here: Meet the team.
Land Remediation Relief (LRR)
What is Land Remediation Relief (LRR)? Who can claim LRR and what are the conditions? What happens if LRR creates or enhances a loss?
40% First Year Allowance (FYA)
As of 1 January 2026, a new 40% First Year Allowance (FYA) is available for main rate capital expenditure incurred by companies and unincorporated businesses. Unlike other FYAs, this allowance is available on assets used for leasing.
IHT: Loans and restrictions on liabilities against the estate
When are loans deductible from the estate on death? What restrictions are there? What anti-avoidance rules do I need to consider?
Guides & Updates
New This Week
Capital Allowances: What's new 2026-27?
NEW: What's new in Capital Allowances for 2026-27? A summary of the main different types of capital allowances currently available to UK businesses, and recent developments.
Welsh Taxes: What's new 2026-27?
NEW: What’s new for Welsh taxes in 2026-27? What updates have occurred this year? What changes must be implemented for 2026-27?
Self-employed
Working from home (self-employed)
UPDATE: What expenses can you claim for working from home if you are self-employed? Are there special rules and precedents for certain types of trade or profession?
Directors & Companies
Reorganisations & Reconstructions
What is a company reorganisation or reconstruction? What tax reliefs apply to a company reorganisation, a share for share exchange or a reconstruction?
Pre-trading expenses (companies)
What are pre-trading expenses? What tax relief is available for pre-trading expenses? What are the restrictions on relief? What expenses will not qualify? What about pre-incorporation expenses?
Employers
Termination, redundancy and leaving payments
UPDATE: How are redundancy and termination payments taxed? What amounts can be paid tax-free? What amounts are taxable as earnings?
Electric Vehicles: Update 2026
With the increased focus on achieving Net Zero, the government is planning to ban new petrol and diesel car sales by 2030. We review some tax issues that businesses and their employees may consider when acquiring or providing an electric vehicle.
Private Client & Estate Planning
Pensions: What happens when you die?
What happens to your pension when you die? Will your family have to pay Income Tax if they receive your pension in the future? What can you do to mitigate any tax charges? What are the new IHT rules on pensions for April 2027?
PRR: Private Residence Relief
What is Private Residence Relief (PRR)? What are the qualifying conditions? Can you claim relief on two homes? How do you claim PRR? Can you claim PRR if you develop your garden?
Land & Property
Non-Resident Landlord Scheme
What is the Non-Resident Landlord scheme? How does it work? Who does it apply to? How can I apply to receive rent without a withholding tax deduction?
Penalties & Compliance
Penalties: Failure to Notify
What tax penalties apply if you fail to notify HMRC that you are chargeable to tax? Can they be appealed or reduced?
VAT
Transfer Of a Going Concern (TOGC)
Buying a business and VAT, do you take over the previous owners' VAT registration? What is a Transfer Of a Going Concern (TOGC)? What conditions must be met? What are the consequences of a TOGC?
Continuing Professional Development (CPD)
Recent and upcoming webinars include:
- Practice Insight - May 2026 (free)
- Monthly Tax Update - May 2026
- Practice Insight - April 2026 (free)
- Monthly Tax Update - April 2026
- Mandatory HMRC Agent Registration Part 1 – Getting Started Before May 2026
- Monthly Tax Update - March 2026 (Spring Forecast)
- Inheritance Tax Planning for 2026/27 and Beyond
- Ethics and PCRT for Tax Advisors
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, reorganisations and much more.
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Ross Martin Tax: SME Tax Update 23 April 2026
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- Employer Bulletin: April 2026
- Employment-Related Securities Bulletin 65: April 2026
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- Tribunal agreed that extended time limits for loss carry-back applied
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