Hello,
Among this week's highlights are more warnings about relying on unverified Artificial Intelligence (AI) output, the latest employment status tribunal decision, HMRC’s view on the VAT liability of public electric vehicle charge points and the First Tier Tribunal's (FTT) interpretation of the Statutory Residence Test.
AI features in two separate items in this week’s SME Tax Update. First, HMRC report a growing trend of VAT returns being submitted late when the due date falls on a weekend or bank holiday. The cause appears to be taxpayers and agents relying on incorrect information provided by AI, without interrogating it.
That theme can also be found in the Omar Rafique v HMRC decision, where an individual repeatedly submitted AI-generated correspondence containing hallucinated cases and other errors to HMRC and the FTT. As we have seen in previous similar decisions, the FTT did not mince its words when reminding all parties that failing to verify the accuracy of submissions and misleading the tribunal may amount to contempt of court.
Anyone advising on the Statutory Residence Test will find the Michael Parker v HMRC decision of interest, as it considers exceptional circumstances as well as the transit exception. HMRC sought to apply both exceptions restrictively, but the FTT ultimately sided with the taxpayer.
We also examine the FTT’s decision in Professional Game Match Officials Limited (PGMOL) v HMRC this week. This is now the fifth judgment concerning the employment status of PGMOL football referees, this case having previously gone to the Supreme Court. HMRC lost this rematch, with the FTT concluding that the referees were self-employed in what was “not a finely balanced case".
More news, cases and updates below, including another newly-published ‘What’s new?’ subscriber guide for 2026-27, focusing on partnerships.
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Quick News
VAT return due dates not extended for weekends or bank holidays
Incorrect advice provided by Artificial Intelligence (AI) and third-party websites is contributing to a growing trend of late VAT return filing and payment. HMRC are reminding agents and taxpayers that there is no deadline extension if the due date falls on a bank holiday or weekend.
R&C Brief 4 (2026): VAT and public electric vehicle charge points
HMRC have published 'Revenue and Customs Brief 4 (2026): VAT liability of supplies of electricity from public electric vehicle charge points'. This explains HMRC’s position following the First Tier Tribunal (FTT) decision in Charge My Street Ltd v HMRC [2026] TC09802.
Tax Cases
Game over? Another FTT win for football referees
In Professional Game Match Officials Limited v HMRC [2026] TC09870, the First Tier Tribunal (FTT) found that referees engaged by the company were not employees. The long-standing case emphasises the 'multi-factorial' approach required when determining employment status.
Individual persistently used illusionary AI cases
In Omar Rafique v HMRC [2026] TC09874, the First Tier Tribunal (FTT) found that an application to reinstate a struck-out VAT appeal should be refused. The appellant had persistently failed to comply with tribunal directions and 'Unless Orders', and had repeatedly submitted AI-generated correspondence containing fabricated case authorities.
Missed flights, not missed residency tests
In Michael Parker v HMRC [2026] TC09868, the First Tier Tribunal (FTT) found that days spent in the UK by an overseas engineer travelling between Iraq, the UK, and holiday destinations could be excluded under the transit days and exceptional circumstances provisions.
Debt assignment to shareholder taxed as income distribution
In Sarah Thomas v HMRC [2026] TC09861, the First Tier Tribunal (FTT) found that a debt assignment from a company to a shareholder was taxable as an income distribution to the extent that it exceeded the shareholder's loan account. A lack of documentary evidence for the loan account and an obstructive approach did not help the taxpayer.
Editor's Choice
This week's Editor's Choice was selected by Jenni Davie. You can meet our team of editors and writers here: Meet the team.
Goodwill & Incorporation: Tax issues
What are the tax issues concerning Intangible Property (IP) assets, such as goodwill, on incorporation? What tax reliefs apply if you buy and sell goodwill and IP? What are the valuation and clearance procedures?
Non-resident tax toolkit
This toolkit covers the key UK tax issues for non-UK resident individuals holding UK assets and property and working in the UK.
SDLT: Residential property & dwellings
What is residential property for Stamp Duty Land Tax (SDLT)? What tax rate applies? What garden and grounds are subject to higher rates of SDLT?
Guides & Updates
New This Week
Partnerships: What's new 2026-27?
NEW: What's new for partnerships in 2026-27?
Self-employed
Website and e-commerce costs
What tax relief is there for the costs relating to designing, creating, and maintaining a website, software or e-commerce development?
Sponsorship
Is sponsorship an allowable expense for tax purposes? When is it disallowed? What is the case law?
Directors & Companies
Interest relief: Making a loan to a close company
Individuals can claim tax relief for interest paid on a loan where the funds are used by a close company or used to buy an interest in a close company. Which loans qualify? What is a business purpose?
Employers
Employment-Related Securities: Reporting
What are the reporting requirements for Employment-Related Securities (ERS)? When is the deadline? How do I register an ERS scheme? What are the penalties for failing to report ERS?
Cycles & cyclists' safety equipment
What is the Cycle to Work scheme? What are the conditions? Is cycle equipment included in these provisions? What tax relief is available? What happens if the cycle is transferred to the employee?
Private Client & Estate Planning
CGT: Loans to traders relief
What is loans to traders relief? When can it be claimed? What are the conditions of the relief?
National Insurance: What's the maximum payable?
How are National Insurance Contributions (NICs) limited? What is the maximum payable? What different rules apply to employment and self-employment income?
Self Assessment Return 2025/26: What's new?
UPDATE: 2026 Self Assessment toolkit: top tips for completing tax returns for the year ending 5 April 2026.
Overseas & Residence
SRT: Split Year Treatment
What is Split Year Treatment? When does it apply?
More Tax Guides
Finance Acts 2026-27: tax update and Rolling Tax Planner
This rolling planner tracks the key tax announcements that impact the 2026-27 tax year and beyond. This planner is updated on an ongoing basis.
VAT
Capital Goods Scheme
What is the VAT Capital Goods Scheme (CGS)? When do I use it? How does it work?
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.
Missed the Last Tax Update?
Ross Martin Tax: SME Tax Update 7 May 2026
- New sanctions guidance on mandatory tax adviser registration
- HMRC trials simplified tax coding
- HMRC release new guidance on Multi-Factor Authentication for agents
- No late filing penalties for voluntary tax returns
- CoA rules loan to EBT not earnings
- Globally mobile employees: Travel expenses for employees performing duties overseas
- P11D: Reporting benefits and expenses
- Residence v non-residence: tax treatment
- Company Tax: What's New? FY2026 NEW
- VAT: What's new 2026-27? NEW ...More
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