Hello,
In what has been a relatively quiet week for tax news, we explore the latest cases on trading loss relief, the novation of directors' loans, and the VAT treatment of assessments within an online maths learning product. We also look at HMRC’s most recent one-to-many letters.
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One of our case highlights this week is that of Raymond and Diana Eyre v HMRC. Here, the First Tier Tribunal (FTT) was asked to consider whether a trade existed in the context of a property redevelopment.
The Eyres had purchased a house in Chelsea in September 2010 for £9.75m, before demolishing it. A new house was built on the site and sold for £27m in February 2015. The FTT found that a trade did not exist, and the Eyres were entitled to Private Residence Relief (PRR) for their period of occupation of the property as their main residence.
Of course, not all transactions result in such significant financial gains. In Charlotte MacDonald v HMRC, the FTT examined the availability of sideways loss relief in the context of a woodland shoot. This provides a useful reminder of the conditions that need to be met for loss relief to be available. While the FTT decided that the shoot was carried on on a commercial basis, it was not carried on with a view to the realisation of profits, so loss relief was denied.
More news, cases, and updates below, including our new guide to Land Remediation Relief in Editor’s Choice.
The Ross Martin Tax Team
Online PRACTICAL tax resources for accountants and tax advisers BY accountants and tax advisers.
Quick News
Another decrease in HMRC's interest rate
Following the Bank of England’s announcement on 8 May 2025 that the base rate would decrease to 4.25%, HMRC's interest rates are also decreasing by 0.25%, to 8.25% for late payment interest and 3.25% for repayment interest, from 28 May 2025.
One-to-many letters: Tracker
HMRC's latest one-to-many letter is being sent to companies selling goods by mail order or on the internet, warning them that those sectors are being targeted by agents and other third parties to make Research & Development (R&D) claims which may be invalid.
Spotlight 70: VAT grouping structure arrangements used by care providers
HMRC have published Tax Avoidance Spotlight 70 ‘VAT grouping structure arrangements used by care providers’, highlighting tax avoidance arrangements used by state-regulated care providers to reclaim VAT.
Tax Cases
Loan novation resulted in Income Tax charge
In Nicholas Powell v HMRC [2025] TC09518, the First Tier Tribunal (FTT) found that an Income Tax charge arose on the novation of a director’s loan account from one company to its parent. Under the novation deed, a loan to a participator had been released.
FTT denies sideways loss relief
In Charlotte MacDonald v HMRC [2025] TC09504, the First Tier Tribunal (FTT) found that sideways loss relief could not be claimed in respect of an annual 'woodland shoot' on an estate. The activities were not carried on with a view to the realisation of profits.
Online maths tests not VAT exempt
In Generic Maths Ltd v HMRC [2025] TC09497, the First Tier Tribunal (FTT) found that the supply of assessments included in an online maths learning product, which tested a student’s maths ability, were standard-rated for VAT.
Private Residence Relief granted on £27 million disposal
In Raymond and Diana Eyre v HMRC [2025] TC09498, the First Tier Tribunal (FTT) found that a couple who purchased, renovated and disposed of a property for £27 million were not doing so in the 'nature of trade'. In addition, they were entitled to claim Private Residence Relief.
Editor's Choice
Land Remediation Relief (LRR)
NEW: What is Land Remediation Relief (LRR)? Who can claim LRR, and what are the conditions? What happens if LRR creates or enhances a loss?
Capital Allowances: What's new 2025-26
What's new in Capital Allowances for 2025-26? A summary of the main different types of capital allowances currently available to UK businesses.
Guides & Updates
Self-employed
Badges of trade: Are you trading or not?
Are you trading, running a business or just buying and selling investments? Is your 'side-hustle' taxable? The 'Badges of Trade' are a set of indicators built up over time by the courts to decide when an activity is a trading or investment activity.
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?
Incorporation
Sole trader v. limited company: Tax differences & savings (2025/26)
Is it better from both a tax and legal point of view to run your business as a sole trader or as a company? Are there tax advantages in running a business as a company? What legal protections apply?
Directors & Companies
Interest relief: Making a loan to a close company
Individuals can claim tax relief for interest paid on a loan where the funds are used by a close company or used to buy an interest in a close company. Which loans qualify? What is a business purpose?
Employers
Accommodation benefit
When is accommodation a taxable benefit? What are the exemptions? How is the benefit calculated? Can accommodation be claimed as part of business travel?
Staff Suggestion Schemes
Employee suggestion schemes can provide tax-free benefits. How should they be structured? Who is eligible? How much can be claimed?
Private Client & Estate Planning
PRR: Private Residence Relief
What is Private Residence Relief (PRR)? What are the qualifying conditions? Can you claim relief on two homes? How do you claim PRR? Can you claim PRR if you develop your garden?
CGT: Loans to traders relief
What is loans to traders relief? When can it be claimed? What are the conditions of the relief?
Overseas & Residence
Non-Resident Landlord Scheme
What is the Non-Resident Landlord scheme? How does it work? Who does it apply to? How can I apply to receive rent without a withholding tax deduction?
VAT
Education & VAT
What rate of VAT applies to education? What sort of services are classed as education? What do you do if you have multiple supplies, including education? What cases are there on VAT and education?
Cars & Vans: VAT
What is a car for VAT? What is a van for VAT? What VAT can be recovered on a car that is bought? Leased? What about fuel? Or mileage reimbursements?
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:
- Practice Insight - May 2025 (free)
- Monthly Tax Update - April 2025
- 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
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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 8 May 2025
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