Hello,
This week, we look at HMRC’s latest Employer Bulletin, which provides various updates for the 2025-26 tax year and guidance on reporting 2024-25 expenses and benefits. In addition, we examine two First Tier Tribunal (FTT) decisions, with one being in the context of an overdrawn director’s loan account.
The FTT decision in Gary Quillan v HMRC makes for interesting reading. This case concerned an insolvent company in which the director had an overdrawn loan account, only part of which was settled during the liquidation process.
The question considered by the FTT was whether the balance of the loan account, which the liquidator had not recovered, had been written off or released such that an Income Tax charge arose on the director. The FTT’s decision found against HMRC’s stated policy in the Company Taxation Manual. We wait to see if an appeal to the Upper Tribunal is made.
In other news, the Federation of Small Businesses (FSB) has released a report expressing concern over the time spent by small businesses on tax compliance and the impact that has on UK productivity. The FSB makes several recommendations to address its findings.
Finally, if you Receive our weekly tax update by email, from 1 May 2025, it will come from
More news, cases and updates below.
The Ross Martin Tax Team
Online PRACTICAL tax resources for accountants and tax advisers BY accountants and tax advisers.
Quick News
Employer Bulletin: April 2025
HMRC have published the Employer Bulletin for April 2025, which includes various updates for the 2025-26 tax year, as well as guidance on reporting 2024-25 expenses and benefits. We have summarised the key content for you, with links to our detailed guidance on the topics covered.
Tax red tape ties up £25bn for SMEs
The Federation of Small Businesses (FSB) has released a report, 'Taking a Toll: Small businesses and the cost of Tax Compliance'. The comprehensive document reports that small firms collectively spend over 27,000 years and nearly £25 billion per year on tax compliance, and reducing these levels would boost UK productivity.
Tax Cases
Director's loan neither released nor written off
In Gary Quillan v HMRC [2025] TC09487, the First Tier Tribunal (FTT) found that no Income Tax charge arose on an overdrawn director's loan from a company in insolvency, as the loan had not been formally released or written off.
MDR claim dismissed for separate annexe
In Hani and Diana Gabra v HMRC [2025] TC09473, the First Tier Tribunal (FTT) found that Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax (SDLT) purposes was not available on the purchase of a house with a separate annexe; the annexe lacked the facilities to meet basic domestic living needs.
Editor's Choice
Annual Tax on Enveloped Dwellings (ATED)
What is the Annual Tax on Enveloped Dwellings (ATED)? Who does ATED apply to? What relief is available and how is it claimed? What are the ATED return filing dates?
Tax Return questionnaire
What information is needed to complete a Self Assessment Tax Return? This questionnaire will help you gather the documents and information required.
Annual Investment Allowance (AIA): Related companies
What restrictions to AIA apply to companies? What does common control mean? When are companies related?
Guides & Updates
Self-employed
MTD: Toolkit for accountants
UPDATE: What is the current timetable for Making Tax Digital (MTD)? When will MTD for Income Tax become mandatory? How will it work? Which clients will be excluded? What planning needs to be undertaken?
Compare software for Making Tax Digital for Income Tax
UPDATE: What software is available for MTD for Income Tax? What's the most suitable software I can use? Which software does HMRC list as working for MTD for Income Tax? What to consider before choosing software?
Partnerships
Partnership agreements: What should be considered?
Partnership agreements can be invaluable to clarify everyday matters and settle disputes within a partnership. What sort of things should be discussed for inclusion in a partnership agreement? Why are they important?
Incorporation
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?
Directors & Companies
Directors' loan accounts: Toolkit (subscribers)
What is the tax treatment for an overdrawn director's loan account? What are the consequences of an outstanding loan to a participator?
Close Investment Holding Companies
What is a Close Investment Holding Company? When does a close company become a Close Investment Holding Company? What are the consequences for tax? How do you avoid becoming a Close Investment Holding Company?
Employers
Exemption for paid and reimbursed expenses
What exemptions apply for paid and reimbursed employee expenses? What are the rules?
Vans and Commercial vehicles
What is the Benefit In Kind charge if you drive a company van? What is van fuel benefit? What is the tax on zero-emission vans.
Private Client & Estate Planning
IHT: Main Residence Nil-Rate Band (RNRB)
What is the Main Residence Nil-Rate band? When was it introduced? How does it work? Who can claim it?
How to close a UK trust
What are the tax implications of winding up a trust? What do I need to do as a trustee to wind up a trust? Why wind up a trust?
Land & Property
Land: future consideration (overage)
A guide to the tax treatment of future consideration payable on the disposal of land.
Goodwill: trade-related properties
What are the tax and accounting issues when valuing goodwill in connection with the purchase or sale of a trade-related property? What are HMRC's views? What does case law tell us?
VAT
VAT fraud: What is the Kittel principle?
What is the VAT Kittel principle? What happens when the Kittel principle applies? What tests do HMRC and the tribunals apply? How can I protect my business?
Reverse charge: Domestic
Domestic reverse charge VAT is a mechanism designed to prevent VAT fraud. When does it apply? How does it operate?
Tax Tools & Calculators
Tax tools & calculators
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
Recent webinars include:
- Disincorporation - I'm an OMB Company, Get Me Out of Here!
- Practice Insight - April 2025 (free)
- Making Tax Digital for Income Tax - Roadmap to April 2026
- Monthly Tax Update - Spring Statement Special
- Practice Insight - March 2025 (free)
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, R&D claims, reorganisations and much more.
Missed the Last Tax Update?
Ross Martin Tax: SME Tax News 17 April 2025
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