Hello,
We are anything but short of news this week. Our highlights include the new review of Loan Charge settlements and a twist in a long-running LLP court battle. In case you did not notice, 31st January is the filing deadline for Self Assessment (and also the last day to make a Time to Pay agreement).
Going for Growth (long term): the Chancellor's speech made to business leaders this week hit the headlines and we have a report. Rachel Reeves outlined a series of measures designed to promote growth, over time. It's looking to be a very exciting time if you are in Research & Development (R&D) or Construction.
Thinking of R&D, China's new open-source AI 'DeepSeek', if it is as good as it's claimed, will be a game-changer. That is because it is 'Open Source' (the source code is free) and substantially cheaper than its US developed rivals. AI will lead to some challenges when it comes to reviewing R&D claims. Think how easy it will be to ask your AI to write up an R&D claim. You can then ask your AI to mark its own homework.
One fascinating side of economic theory is that economists have differing views as to whether tax cuts ever produce growth. There was no mention of tax in the Chancellor's speech, we should add, and we did not expect anything either. She has made it clear that there will be only one fiscal event each year. Only time will tell on that front.
Just when you think you are really on top of the rules, all change! Bluecrest Capital Management's long-running tussle with HMRC has taken a new twist after the Court of Appeal (CoA) decided that the Upper Tribunal had placed too narrow an interpretation on a key aspect of the anti-avoidance Salaried Member rules. Their appeal is being sent back to the First Tier Tribunal (FTT) for a revised decision. Annoyingly for Bluecrest, they relied on HMRC’s published guidance on Condition B.
More news, easier cases and practical updates below.
Nichola and the team
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Quick News
Chancellor's plans to kickstart economic growth
As part of the Government’s aim to ‘Kickstart Economic Growth’, the Chancellor, Rachel Reeves has made a speech to a group of Oxford business leaders announcing increased levels of public spending on investment and creating "a new Silicon Valley" in the UK.
Independent review of the loan charge
Exchequer Secretary to the Treasury, James Murray MP, has announced an independent review of the disguised remuneration loan charge to be led by Ray McCann, former President of the Chartered Institute of Taxation (CIOT).
Defined benefit pension scheme surplus reform
The Government have announced new rules designed to give increased flexibility over how occupational defined benefit pension schemes are managed.
An Inspector calls...
CCO investigation numbers static... again
The number of live cases being investigated and reviewed under the Corporate Criminal Offences (CCO) regime for the failure to prevent the facilitation of tax evasion has remained static, for the second time.
PAYE Settlement Agreement nudge letters
HMRC are contacting employers with a PAYE Settlement Agreement (PSA) who have not yet submitted PSA calculations for 2022-23.
Proposed RTI reporting changes dropped
Following a technical consultation on 'Improving the data HMRC collects from its customers', HMRC have confirmed that proposals to require more detailed employee hours data to be reported through Real-Time Information (RTI) will be scrapped.
Tax Cases
Significant influence test narrowed for salaried members rule
In HMRC v Bluecrest Capital Management (UK) LLP [2025] EWCA Civ 23, the Court of Appeal (CoA) found that the incorrect construction of Condition B was used to determine whether the Salaried Member rules applied. Both the First Tier Tribunal (FTT) and Upper Tribunal (UT) erred in law in accepting the broader interpretation of ‘influence’ set out in HMRC’s guidance.
£28 million ruling overturned for Scottish Power
In Scottish Power Ltd v HMRC [2025] EWCA Civ3, the Court of Appeal (CoA) overturned a decision made by the Upper Tribunal (UT). The court found £28 million of settlements paid to customers were made in the course of business and were not penalties: they were an allowable deduction for Corporation Tax purposes.
Group member 'party to' arrangements for EIS purposes
In Hoopla Animation Ltd v HMRC [2025] UT00028, the Upper Tribunal (UT) dismissed an appeal relating to the eligibility of shares in a pre-school film venture's Special Purpose Vehicle (SPV) for EIS relief purposes. A member of a group of companies who had provided subcontracting services to the SPV was 'party to' the arrangements.
Editor's Choice (subscribers)
Scottish Taxes: What's New 2025?
What’s new for Scottish taxes in 2024/25? What updates have occurred this year? What new changes will be implemented for 2025/26?
Salaried members: When is a partner taxed as an employee?
In some circumstances, Limited Liability Partnership (LLP) members are taxed as employees under PAYE. What are the Salaried Member rules? When do they apply? What are the conditions?
What's in your 2025 training program?
20:20 Innovation Tax Product Review (CPD)
Join Sharon Cooke and Nichola Ross Martin for a webinar in which we look at ways in which accountants can obtain timely and relevant tax knowledge, resources and support from the 20:20 Innovation portfolio of products and services. When? February 27th 2025 ...More
Guides & Updates
Self-employed
Training and course fees (self-employed)
Can a self-employed trader claim tax relief on their costs of training and ongoing professional development? Are training fees capital by nature?
Practical Tax Toolkits & Checklists: signpost
Our Practical Tax Toolkits for self-employed traders are designed to ADD VALUE for tax advisers and accountants.
Directors & Companies
Checklists & Practical Tax Tools for companies: signpost
These company tax compliance checklists and tax planning toolkits are designed for tax advisers and accountants.
Capital Allowances: What's new 2024-25
What's new in Capital Allowances for 2024-25? A summary of the different types of capital allowances currently available to UK businesses.
Employers
Loan Charge Review: At a glance (Terms of Reference)
The Exchequer Secretary to the Treasury, James Murray, has announced an independent review of the loan charge to bring matters to a close for taxpayers affected by the legislation. What will the terms of the review be? When can we expect an outcome? What should affected taxpayers do now?
Private Client & Estate Planning
Pensions: Tax rules and planning
What tax rules apply to pensions? What tax relief is available? What tax charges can arise? What planning opportunities are there?
Employee Ownership Trusts: An exit route for owner-managers
Update: The government has proposed amendments to the Finance Bill 2024-25 by extending the definition of 'acquisition costs'
Deferred consideration and earn-outs
How is deferred consideration taxed? What are the tax consequences of an earn-out? Typically when a business is sold a buyer may hold back or defer paying the whole of the purchase price until certain agreed conditions are satisfied or profit targets are met.
Incorporation
Capital allowances: On incorporation
What is the capital allowance position when an existing business is incorporated? What elections need to be made?
Goodwill & incorporation: Tax issues
What are the tax issues in respect of 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?
VAT News & Cases
Assessments: Best judgement & time limits
What is a 'best judgment' assessment for VAT? When can HMRC raise one? What are your rights of appeal? How do you displace a best judgment assessment? What are the time limits for a VAT assessment?
Tax Tools & Calculators
Tax tools & calculators
UPDATE: 2024/25 versions available now. We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes.
Calendar of tax deadlines and new tax measures
UPDATE: This is a freeview 'At a glance' rolling calendar of common recurring tax deadlines, new tax measures and other tax-significant events.
CPD
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- Purchase of Own Shares: all the details.
- Anti-money Laundering Update and Firm-Wide Risk Assessment ...More...
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Ross Martin Tax: SME Tax News 23 January 2025
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