Hello,
VAT features heavily this week, with HMRC publishing three Revenue & Customs briefs in quick succession. Elsewhere, the date for the next Scottish Budget has been announced, and HMRC have provided some long-awaited clarification on completing tax returns for directors.
The Scottish Budget for 2027-28 will take place on 3 December 2026. A key decision to watch for will be how the Scottish government uses the power granted by the Finance Act 2026 to set its own separate tax rate for property income. In our news article, we take a brief look at what that decision could mean for Scottish taxpayers.
HMRC have also addressed some uncertainties around the new close company reporting requirements and what they mean for unpaid directors and directors without a shareholding. While the uncertainty has now been resolved, the outcome may not be quite so welcome for those preparing tax returns.
VAT advisers have several developments to note this week. HMRC have addressed a longstanding post-Brexit issue affecting non-UK members of VAT groups and provided guidance following the Court of Appeal's decision in St Patrick's International College that will be of interest to alternative education providers. HMRC also set out how the temporary zero rate for qualifying supplies of electricity in England, Scotland and Wales will operate.
Staying with VAT, a tribunal decision on input tax recovery involving a luxury vehicle highlights the importance of establishing a taxpayer's intention at the time the expenditure is incurred. HMRC built their case around how the vehicle was used after its purchase, but the court placed more weight on the facts and circumstances surrounding its acquisition.
More news, updates and cases below.
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Autumn Budget 2026: Analysis, Client Newsletter & Webinar
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Quick News
Tax return requirements for directors clarified
HMRC have clarified the position on Self Assessment reporting requirements for directors of close companies and updated their guidance for directors of charities.
Scottish Budget 2027-28 date announced
Jenny Gilruth MSP, Scottish Deputy First Minister and Cabinet Secretary for Finance and Local Government, has announced that the 2027-28 Scottish Budget will be presented to Parliament on Thursday 3 December 2026.
R&C Brief 10 (2026): Temporary zero rate of VAT for domestic electricity in Great Britain
HMRC have published 'Revenue & Customs Brief 10 (2026): Temporary zero rate of VAT for domestic electricity in Great Britain’. It specifies how the temporary zero rate of VAT for qualifying supplies of electricity in Great Britain will operate.
R&C Brief 9 (2026): VAT treatment of education provided by alternative providers
HMRC have published 'Revenue & Customs Brief 9 (2026): VAT liability of supplies of education by alternative providers of higher and further education’. It provides an update on HMRC’s position on the VAT treatment of supplies of education and closely related services provided by alternative providers.
R&C Brief 8 (2026): UK VAT refunds for non-UK businesses in a VAT group
HMRC have published 'Revenue & Customs Brief 8 (2026): UK VAT refunds for non-UK businesses in a VAT group'. It explains changes to how non-UK businesses in a VAT group should make future UK VAT refund claims, including transitional arrangements and how to ask HMRC to reconsider claims made since 1 January 2021 that have been refused.
Tax Cases (subscription content)
Intention at acquisition key to input VAT recovery on luxury hire vehicle
In Luxurico Ltd v HMRC [2026] TC10001, the First Tier Tribunal found that input VAT was recoverable on a luxury vehicle hire business's acquisition of a hypercar. The taxpayer's intention at the time of purchase, and not necessarily subsequent use, was key in determining allowability.
UT dismisses 'Transactions in Securities' appeal
In the Executors of Paul Hunt & Ors v HMRC [2026] UKUT 00342, the Upper Tribunal (UT) dismissed the taxpayers' appeal. Amounts received on a company capital reduction were not excluded from the Transactions in Securities (TiS) anti-avoidance legislation.
Failed 'cleansing' scheme results in loan charge
In Grand Smile Design Limited v HMRC [2026] TC10000, the First Tier Tribunal (FTT) found that a Disguised Remuneration quasi-loan had not been repaid by 5 April 2019 despite the taxpayer using a loan 'cleansing' scheme. A transfer of shares to settle the outstanding amount was not a 'payment' and the loan charge applied.
Editor's Choice
This week's Editor's Choice was selected by Dan Hurst. You can meet our team of editors and writers here: Meet the team.
VAT: What's new 2026-27?
What's new in VAT for 2026-27? What are the recent cases? What policy changes have HMRC announced?
Website & software costs
What tax relief can a company claim on the cost of buying or creating a website, software or e-commerce development?
Termination, redundancy and leaving payments
How are redundancy and termination payments taxed? What amounts can be paid tax-free? What amounts are taxable as earnings?
Guides & Updates
New This Week
IHT Asset Valuation Rules
How are assets valued for Inheritance Tax (IHT)? What is the general valuation rule? When is a professional valuation required? Are there any special valuation rules? What are the related property rules? How are shares valued?
Growth and Skills Levy
What is the Growth and Skills Levy? Who pays it? How does it work?
Self-employed
Sponsorship
Is sponsorship an allowable expense for tax purposes? When is it disallowed? What is the case law?
Directors & Companies
Corporate Interest Restriction (CIR)
The Corporate Interest Restriction (CIR) is designed to restrict profit shifting by large corporates by restricting the amount of deductible interest in an accounting period. Who is affected? What is the restriction? What are the penalties?
What is a small or medium-sized company?
What is an SME? What size is a small company under the Companies Act? What size is a micro company? What size are Medium and Large companies?
Employers
Eye tests and glasses
Can you provide staff with eye tests? Is there a taxable benefit if you provide employees with eye tests or glasses?
Capital Allowances
What expenditure qualifies for plant & machinery allowances?
What is plant and machinery? What expenditure qualifies as plant and machinery? What is treated as part of a building?
Private Client & Estate Planning
Self Assessment Return 2025/26: What's new?
2026 Self Assessment toolkit: top tips for completing tax returns for the year ending 5 April 2026. Additional reporting requirements for directors of close companies are one of the significant issues this year: what needs to be reported, and how? What is the latest guidance?
Leases in relation to land
What are the Capital Gains Tax (CGT) and Income Tax consequences of leases? What is the difference between a grant and an assignment? What is a premium and a reverse premium? What are the tax consequences of a lease extension and surrender?
Penalties & Compliance
Tax Agents: HMRC's Standard for Agents
Our guide to HMRC's 'Standard for agents', HMRC's approach to tackling bad agent behaviour, and providing a definition of a tax adviser.
More Tax Guides
Tax Data Card 2026-27
A summary of key tax rates and allowances for 2026-27 and 2025-26.
VAT
Place of supply: Goods
The place of supply (POS) of goods determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply.
Continuing Professional Development (CPD)
Recent and upcoming webinars include:
- Monthly Tax Update - October 2026
- Practice Insight - September 2026 (free)
- Monthly Tax Update - September 2026
- Practice Insight - July 2026 (free)
- Capital Gains Tax Planning Strategies to Maximise Net Proceeds (free)
- Mandatory HMRC Agent Registration Part 2 - Where We Are Now
- Ethics and PCRT for Tax Advisors
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Missed the Last Tax Update?
Ross Martin Tax: SME Tax Update 3 September 2026
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- GAAR Opinion: Disguised Remuneration arrangements using dual payments
- One-to-many letters' tracker
- Tribunal asks HMRC to show its workings
- Share matching rules for individuals and companies NEW
- Sole trader v limited company: Tax differences & savings (2026/27) NEW
- Class 4 National Insurance Contributions (NICs) NEW
- 2026 Loan Charge settlement terms NEW
- Stamp Taxes on shares NEW
- Post-Mortem Reliefs NEW ...More
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