Hello,
As is well known, Making Tax Digital (MTD) for Income Tax (IT) becomes mandatory from 6 April 2026 for those with a combined annual gross income from self-employment and property letting that exceeds £50,000.
As many are now turning their attention to how MTD for IT compliance will work in practice, interim guidance has been issued by several professional bodies on how Professional Conduct in Relation to Taxation (PCRT) will apply to the new regime.
The guidance addresses many commonly asked questions, such as those surrounding the use of estimates based on historic figures, and submission of ‘nil’ quarterly updates. This is essential reading for those involved either directly or indirectly with MTD for IT.
In other news, it has become apparent that since 2024, the online tax accounts of around 100,000 individuals have been accessed by criminals, costing HMRC approximately £47m in fraudulent repayments.
HMRC are now writing to affected individuals, most of whom were in Pay As You Earn (PAYE), with details of how they can restore access to their online accounts. In most cases, the individuals affected did not have an active digital tax account, meaning the criminals set up new credentials based on information obtained from phishing attacks on the individuals.
One of our case highlights this week is that of Tamzin Eyre & Ors v HMRC. This considered whether a company intending to redevelop a property was a ‘trading company’ for Entrepreneurs’ Relief (now Business Asset Disposal Relief) purposes; a common question faced in practice.
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
New guidance on MTD and professional standards
The main professional bodies have published ‘Topical guidance covering the application of professional standards to the provision of MTD for Income Tax services’. This aims to provide clarity on how Professional Conduct in Relation to Taxation (PCRT) will apply to Making Tax Digital for Income Tax.
Unauthorised access of HMRC online accounts
HMRC report that their security systems have detected unauthorised access to some taxpayers’ online accounts, in an attempt to obtain money from HMRC. Around 100,000 individuals are affected, with £47m having been lost by HMRC. Guidance has been published for those impacted.
One-to-many letters: Tracker
HMRC's latest one-to-many letter targets individuals recorded on Companies House as a Person with Significant Control (PSC) who may not have declared all income and gains.
Tax Cases
No trade, no Entrepreneurs’ Relief
In Tamzin Eyre & Ors v HMRC [2025] TC09530, the First Tier Tribunal (FTT) found that a company intending to develop a property was not a ‘trading company’ for Entrepreneurs’ Relief (now Business Asset Disposal Relief) purposes. Its activities included, to a substantial extent, activities other than trading activities.
Capital reduction not exempt from TiS rules
In Paul Hunt & Ors v HMRC [2025] TC09519, the First Tier Tribunal (FTT) disagreed with the taxpayers’ interpretation that £10 million received from cancelled shares in April 2015 was exempted from the Transactions in Securities (TiS) legislation.
Supercar driving experiences qualified for VAT reduced rating
In Ingliston Driving Experiences Ltd v HMRC [2025] TC09528, the First Tier Tribunal (FTT) found that for VAT purposes, ‘supercar driving experiences’ were a supply of a right of admission to a facility similar to a fair or amusement park. Temporary reduced rating applied.
Walkers ‘Sensations Poppadoms’ standard rated for VAT
In Walkers Snack Foods Limited v HMRC [2025] UKUT00155, the Upper Tribunal (UT) found that the First Tier Tribunal (FTT) had not erred in law when it found Walkers ‘Sensations Poppadoms’ were standard-rated for VAT. They were made from potato and potato starch, and were similar to potato crisps.
Editor's Choice
Estates: Income Tax and Capital Gains Tax
How do executors deal with income and capital gains arising from the deceased’s estate? What allowances and reliefs are available?
Guides & Updates
Self-employed
Board and lodging adjustments
What private use adjustment should be made for board and lodging where a taxpayer lives at the business premises?
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?
Directors & Companies
Loss relief (Income Tax) disposal of shares
Share Loss relief allows you to offset a loss made on the disposal of shares against income instead of following normal capital loss treatment.
R&D: Claim Notification
UPDATE: What is a claim notification? When does a company need to submit a claim notification? What is the deadline? What happens if a company fails to submit a claim notification? What information should be included on a claim notification?
Employers
PAYE Settlement Agreements
What are PAYE Settlement Agreements? How do they work? What can be included?
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
Negligible value claims
What is a negligible value claim? When and how can a claim be made?
IHT: Residence Nil-Rate Band (RNRB)
What is the Residence Nil-Rate Band? When was it introduced? How does it work? Who can claim it?
Devolved Taxes
Scottish Income Tax: Am I a Scottish taxpayer?
Who does Scottish Income Tax apply to? Am I resident in Scotland? What constitutes a residence and the 'main' residence?
Penalties & Compliance
Named tax avoidance schemes, promoters, enablers
UPDATE: HMRC have updated their published list of named tax avoidance schemes, promoters, enablers and suppliers. It is not recommended that taxpayers use any of these schemes, as HMRC does not consider that they work and you may end up with a significant tax liability if you engage with the scheme suppliers.
Special Relief
What is Special Relief? When does it apply? Does Special Relief have a time limit to claim?
VAT
Energy-Saving Materials
The supply and fitting of energy-saving materials in residential accommodation attracts the zero rate of VAT. What does it apply to? What are the qualifying conditions? What case law is there on this topic?
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
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 - June 2025 (free)
- Monthly Tax Update - May 2025
- Practice Insight - May 2025 (free)
- Monthly Tax Update - April 2025
- Disincorporation - I'm an OMB Company, Get Me Out of Here!
- Making Tax Digital for Income Tax - Roadmap to April 2026
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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 29 May 2025
- Advisory fuel rates from 1 June 2025
- HMRC issuing incorrect SA302 calculations
- Increase in SEIS investments but decreases in other investor reliefs
- One-to-many letters: Tracker
- AI fails to help taxpayer in HICBC appeal
- Successful appeal against R&D discovery assessment
- ToAA rules applied to rent-free house occupation
- Orthodontic aligners were VAT-exempt
- CGT: Rollover Relief: Exchanges of joint interests in land
- IHT: Normal Expenditure Out of Income (gifts)
- Market Gardening: Tax Overview ...More
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