Hello,
As is often the case, the full implications of last week's Budget only become clearer as the details are explored. One example is how the new CGT Founders’ Relief, due to take effect from April 2027, will be implemented.
The government has published a technical consultation that provides a helpful overview of the proposed qualifying conditions for the relief. These include requirements relating to the individual and the company, and a requirement to satisfy at least two of three growth and innovation tests. Those tests relate to turnover growth, headcount growth and successful R&D claims.
There are several practical issues to resolve. For example, it is proposed that individuals will claim Founders’ Relief through their Self Assessment tax return, yet some of the information needed to support a claim will be held by the company. Given that certain tests may require a review of the 10 years before disposal, some information may be outside of statutory record-keeping requirements.
Questions also arise around what happens if HMRC subsequently challenges an R&D claim that was relied on to satisfy one of the growth and innovation tests. In such cases, an individual could potentially lose their relief and face an additional tax liability, together with interest.
The consultation closes on 30 November 2026, a shorter timetable than is usual for tax consultations, and we can expect legislation for the relief in Finance Bill 2026-27. Advisers will want to familiarise themselves with both the qualifying conditions and the potential pitfalls when advising clients.
Check out our detailed reviews below of this consultation and other Budget-related consultations, including the call for evidence on modernising Corporation Tax administration. More Budget analysis will follow in the coming weeks.
In non-Budget news, HMRC are asking agents with employer-related queries to use the Agent Dedicated Line (ADL) instead of the Employer Helpline as part of a trial aimed at improving support for agents. The Employer Helpline remains available for employers contacting HMRC directly.
More news, cases and updates below, including the Supreme Court's decision on whether redress payments were deductible for Corporation Tax.
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Quick News
Government consults on the detail of Founders' Relief
The government is consulting on the implementation of the newly announced CGT Founders' Relief. It is seeking views on the proposed qualifying conditions and whether they will achieve the intended objectives of the relief.
Consultation on the future use of e-invoicing digital reporting
HMRC have released 'E-invoicing digital reporting: Consultation on the future use of e-invoicing digital reporting'. The consultation seeks views on how introducing electronic invoicing for VAT could improve tax administration and wider public services.
Consultation response: Extending VAT online marketplace liability to combat non-compliance
The government has published 'Consultation response: Extending VAT online marketplaces liability to combat non-compliance'. Online marketplaces will become responsible for accounting for VAT on relevant sales by UK sellers from October 2027.
Call for evidence: Modernising Corporation Tax administration
HMRC have opened a call for evidence, 'Modernising Corporation Tax administration', seeking views on the future of Corporation Tax administration and how it could be simpler, more efficient and more reflective of modern business practices.
Employment-Related Securities Bulletin 69: October 2026
HMRC have released Employment-Related Securities (ERS) Bulletin 69, which focuses on Budget 2026 changes to the Enterprise Management Incentive (EMI) and the Company Share Option Plan (CSOP) scheme, including rebranding CSOP as Enterprise Management Incentives 2 (EMI2).
Tax Cases (subscription content)
Supreme Court rules ScottishPower redress payments not deductible
In ScottishPower (SCPL) Limited & Ors v HMRC [2026] UKSC 35, the Supreme Court (SC) overturned the decision of the Court of Appeal (CoA), finding that around £28 million of redress payments made to settle regulator investigations were not deductible for Corporation Tax (CT). The payments were akin to penalties, so they were not incurred for the purposes of the trade.
Assuming VAT was charged is not evidence that it was
In Unatrade Limited v HMRC [2026] TC10053, the First Tier Tribunal (FTT) found that relying on an assumption that retailers had accounted for VAT was not sufficient evidence to support an input VAT deduction.
Editor's Choice
This week's Editor's Choice was selected by Rachel Davies. You can meet our team of editors and writers here: Meet the team.
Associated companies
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Adviser's Guide: Property Business, profits and losses
What is property income? How is it taxed? How are profits calculated? How are losses relieved? Is National Insurance paid on property income? Is property income classed as a business activity?
Business Asset Disposal Relief (Entrepreneurs' Relief): Disposal of shares or securities in a company
When can you claim Business Asset Disposal Relief (BADR) on a share sale? What is the rate of Business Asset Disposal Relief (Entrepreneurs' Relief)? How do you claim BADR? What case law is there on BADR?
Guides & Updates
New This Week
Tax Data Card 2027-28
A summary of key tax rates and allowances for 2027-28 and 2026-27.
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.
Wholly and exclusively…toolkit
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Directors & Companies
Travel rules for owner-managers
When are travel costs allowable? What are the temporary workplace rules and what is a permanent workplace? What other expenses can be claimed?
Tax-efficient extraction of profits: toolkit (2026/27)
This is a general guide and refresher to help a company and its owner decide how business profits are to be extracted based on current tax rates, reliefs and allowances.
Employers
Employer pension contributions
Is there a taxable employment benefit if an employer makes contributions to an employee's pension scheme? What are the rules for employer pension contributions?
Capital Allowances
Disposal values & rules
What is a disposal for capital allowance purposes? What is the tax consequence of a disposal? What value needs to be accounted for on a disposal?
Private Client & Estate Planning
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. 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?
Land & Property
Cash basis for property businesses
When should landlords use the cash basis? How are profits calculated? Is there an alternative?
Gardens: selling or developing
What are the tax consequences of selling a garden for development purposes? What if the owner develops the garden?
Overseas & Residence
SRT: Statutory Residence Test
What is the Statutory Residence Test (SRT)? Why is it important and how does it determine a person's residency?
More Tax Guides
Tax Data Card 2026-27
UPDATED: A summary of key tax rates and allowances for 2026-27 and 2025-26.
Continuing Professional Development (CPD)
Recent and upcoming webinars include:
- Monthly Tax Update - November 2026 (free)
- Budget Update - October 2026
- Corporation Tax Update and Refresher
- Practice Insight - October 2026 (free)
- Monthly Tax Update - October 2026
- Practice Insight - September 2026 (free)
- Capital Gains Tax Planning Strategies to Maximise Net Proceeds (free)
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Virtual Tax Partner© Support
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Missed the Last Tax Update?
SME Tax Update Autumn Budget Special 29 October 2026
- Autumn Budget 2026: At a glance
- Employer Bulletin: October 2026
- One-to-many letters: Tracker
- FTT rejects 'legitimate expectation' claim in VAT case
- Capital Gains Tax: Autumn Budget 2026
- Companies: Autumn Budget 2026
- Income Tax and National Insurance (for individuals): Autumn Budget 2026
- Inheritance Tax: Autumn Budget 2026
- Large Corporates: Autumn Budget 2026 ...More
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