Hello,
The government's response to its consultation on more timely payments in Income Tax Self Assessment (ITSA) is an interesting read. The good news is that plans to mandate ITSA payments through PAYE have been abandoned. However, the government still intends to automate in-year payments for those with sufficient PAYE income and for taxpayers who make payments on account, bringing tax payments closer to when income is earned.
While changes are not planned until April 2029, this will be a significant shift in how many taxpayers manage their affairs. The transitional year could be particularly challenging, making advance cash flow planning essential for some.
Another Budget-related development is a call for evidence on the VAT treatment of travel services, which puts the Tour Operators’ Margin Scheme (TOMS) under the spotlight. With the UK outside the EU, the government is questioning whether the scheme still serves a purpose, noting that ‘there is no technical reason for the TOMS to continue as the administrative burdens the scheme is designed to overcome are no longer present’.
Options under consideration include withdrawing the scheme altogether, retaining it only for certain supplies, or modifying and simplifying it. The government has said these initial views are intended to prompt discussion rather than indicate a preferred outcome.
Meanwhile, Finance Bill 2026-27 has now been published, containing legislation for several measures due to take effect from April 2027. However, it does not yet include provisions for the new CGT Founders’ Relief. As discussed last week, these proposals are currently the subject of a technical consultation that runs until the end of the month. Draft legislation is expected once the consultation concludes.
We're moving home! As our team has shared today at the 20:20 Innovation Practice Growth Summit, over the next two weeks we are moving all your trusted rossmartin.co.uk Practical Tax Resources onto the 20:20 Innovation site. This process has been designed to be seamless, and we will soon be in touch with clear guidance to move you and your colleagues to the new site and onto your new tax research platform.
While we pack our boxes, we are temporarily pausing your SME Tax Update next week (19 November), but will be back with a bumper issue the following week (26 November). Our team will still be reviewing and writing tax news next week, and you will be able to access it here on www.rossmartin.co.uk as usual. See you on 2020innovation.com soon!
More news, cases and updates below, including an Upper Tribunal decision on whether novating a director’s loan resulted in an Income Tax charge.
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Quick News
Timely payments in Income Tax Self Assessment consultation response
The government has published its response to the consultation on 'Timely payments in Income Tax Self Assessment (ITSA)'. Rather than requiring taxpayers to pay their ITSA liabilities through PAYE, automated in-year payments, such as by Direct Debit, will be the default. Taxpayers with sufficient PAYE income can opt for PAYE collection, and the changes will begin from April 2029.
Call for evidence on VAT treatment of travel services including TOMS
HMRC have released a call for evidence reviewing the VAT treatment of travel services, including the Tour Operators Margin Scheme (TOMS). This invites views on the current VAT treatment of travel services and potential alternative VAT accounting mechanisms.
Government promises clarity on predevelopment costs
The government has published the outcome of its consultation on the 'Tax treatment of predevelopment costs'. Respondents placed particular value on certainty, and the government intends to provide greater clarity on the current tax treatment.
Overseas Workday Relief claims stuck in processing
HMRC are experiencing an issue processing certain 2025-26 Self Assessment tax returns which include elections for Overseas Workday Relief (OWR). Despite this, taxpayers should still pay any tax due by 31 January 2027.
Consultation response sees mandatory reporting of payments to participators scrapped
HMRC have published a response to their consultation, 'Reporting company payments to participators - modernising the reporting framework'. Following the overall negative response to the consultation, the government is not proceeding with the proposed new rules at this time.
HMRC's late payment and repayment interest rates set to increase
Following the Bank of England’s announcement on 5 November 2026 that the base rate would increase to 4.00%, HMRC's interest rates will also increase by 0.25 percentage points. From 24 November 2026, the late payment interest rate will rise to 8.00% and the repayment interest rate to 3.00%.
Consultation response: VAT treatment of land for social housing
HMRC have released a summary of responses to its consultation on the VAT treatment for social housing. From April 2027, the government proposes introducing a new zero-rate relief on land used for building social housing.
Employment-Related Securities Bulletin 70: November 2026
HMRC have released Employment-Related Securities (ERS) Bulletin 70, which focuses on accessibility improvements to the ERS end-of-year templates, guidance and technical notes.
Tax Cases (subscription content)
DIY housebuilder claim rejected by FTT
In Rachel Maddock v HMRC [2026] TC10065, the First Tier Tribunal (FTT) dismissed an appeal for a VAT refund under the DIY Housebuilders Scheme due to the retained parts of the original property exceeding the permitted 'facade' exception. The completed work constituted reconstruction or alteration of an existing building rather than the construction of a new building.
UT confirms novating a director’s loan is still a taxable release
In Nicholas Powell v HMRC [2026] UKUT00418, the Upper Tribunal (UT) agreed that an Income Tax charge arose on the novation of a director shareholder's loan account from a company to its parent. A loan to a participator had been released and the director's appeal was dismissed.
Editor's Choice
This week's Editor's Choice was selected by Carrie-Anne Richards. You can meet our team of editors and writers here: Meet the team.
Class 4 National Insurance Contributions (NICs)
What is Class 4 National Insurance (NI)? Who has to pay it and how is it calculated? What reliefs and exemptions are available? What are the rules for losses?
Growth and Skills Levy
What is the Growth and Skills Levy? Who pays it? How does it work?
At a glance: Reporting CGT when & how?
How do you report your capital gains? What return do you use? There are different ways for individuals to report capital gains depending on whether you are resident or non-resident, and whether you are in or out of Self Assessment.
Guides & Updates
New This Week
Finance Bill 2026-27: Contents
The Finance Bill 2026-27 was published on 4 November 2026. This is a summary of its contents, which includes legislation for the increased property and savings tax rates, the new Pensioner's Tax Allowance, the changes to the First Year Allowance and Writing Down Allowance rates, the increase in Trading Allowance, and halving the Business Asset Disposal Relief lifetime limit.
Self-employed
Losses (sideways): Restriction for uncommercial trades
What is sideways loss relief? What restrictions apply? When do they apply? What is an uncommercial trade?
Directors & Companies
Leaving payments and directors
How are leaving payments to directors taxed? What are the planning opportunities and pitfalls? Does the £30,000 tax-free exemption apply to directors?
Employers
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?
CIS: Contractors and Subcontractors
What is the Construction Industry Scheme? Who does it apply to? How does it work?
Capital Allowances
Long-life assets
What is a long-life asset for capital allowances? What allowances can be claimed on long-life assets? How does the £100,000 monetary limit work?
Private Client & Estate Planning
Trust Registration Service
What is the Trust Registration Service? What trusts does it apply to? What are the requirements and deadlines?
CGT: Chattels
What are chattels? Is it a wasting or non-wasting chattel? How are capital gains on chattels taxed?
Land & Property
Joint property: Legal v beneficial ownership
What is the difference between legal and beneficial ownership? What are the tax consequences? Are the rules different for married couples and civil partners?
Overseas & Residence
A non-resident owner of UK property? Start here
What taxes are relevant for non-resident property owners? What are the reporting requirements for non-resident investors?
More Tax Guides
Professional Conduct in Relation to Taxation
The Professional Conduct in Relation to Taxation (PCRT) sets out the ethical and professional standards expected of members of the seven authoring professional bodies when advising on UK tax matters.
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)
Need Tax Support?
Virtual Tax Partner© Support
Have a tax query? Need a second opinion? 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?
SME Tax Update 5 November 2026
- Government consults on the detail of Founders' Relief
- Consultation on the future use of e-invoicing digital reporting
- Consultation response: Extending VAT online marketplace liability to combat non-compliance
- Call for evidence: Modernising Corporation Tax administration
- Employment-Related Securities Bulletin 69: October 2026
- Supreme Court rules ScottishPower redress payments not deductible
- Assuming VAT was charged is not evidence that it was
- Tax Data Card 2027-28
- Associated companies
- Adviser's Guide: Property Business, profits and losses
- Business Asset Disposal Relief (Entrepreneurs' Relief): Disposal of shares or securities in a company ...More
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