Hello,
This week saw ‘Legislation Day’. It is one of the significant dates in the tax calendar with the Government publishing draft clauses for the 2025-26 Finance Bill along with various supporting documents, including consultation outcomes.
Several of the consultation outcomes, and a significant proportion of the draft legislation, focused on tax compliance and anti-avoidance.
One measure of interest to tax advisers who interact with HMRC on behalf of their clients will be the introduction, from 1 April 2026, of a legal requirement for registration with HMRC, including the need to meet minimum standards. There will be a transitional period of at least three months, with limited exceptions from registration.
The draft legislation for the reform of Agricultural Property Relief (APR) and Business Property Relief (BPR) from 6 April 2026 reveals few changes from the proposals announced last year, but it is now confirmed that the £1m ‘allowance’ for APR and BPR will be indexed in line with CPI, from 2030-31. We also now know that the proposed extension of the related property rules will not go ahead.
As announced at the 2024 Autumn Budget, unused pension funds and death benefits will come within the scope of Inheritance Tax (IHT) from 6 April 2027. Following a consultation, we now know that the deceased’s personal representatives will be responsible for reporting and paying any IHT due, not the pension scheme administrators, as originally planned.
HMRC have also published their Transformation Roadmap, which details over 50 measures to transform the UK’s tax and customs system, setting out a plan for HMRC to be a digital-first organisation by 2030, with 90% of taxpayer interactions taking place digitally (up from 76% at present).
Buried in the details of the Roadmap was the announcement that HMRC do not intend to introduce Making Tax Digital for Corporation Tax, something which will be welcomed by many.
Be sure to take a closer look at our summaries of Legislation Day below, which cover much more detail than the brief flavour above. Do note that there are two versions: paid subscribers will need to sign in to read our detailed summary, or click Here to join us today.
More news and updates below, including HMRC’s July Agent Update.
The Ross Martin Tax Team
Online PRACTICAL tax resources for accountants and tax advisers BY accountants and tax advisers.
Legislation Day 2025
Legislation Day 2025: At a glance
'Legislation Day' (L-Day) was on Monday, 21 July 2025. The Government published draft clauses for Finance Bill 2025-26, along with accompanying explanatory notes, tax information and impact notes, responses to consultations and other supporting documents. This is our freeview summary of the announcements and publications. SUBSCRIBERS: see Editor's Choice below for your detailed version.
HMRC's Transformation Roadmap
HMRC have published their Transformation Roadmap for the future tax and customs system. The aim is to create a modern tax system that supports public finances while reducing the administrative burden on taxpayers.
Land Remediation Relief consultation
HM Treasury has published 'Consultation on Land Remediation Relief' which seeks to review the effectiveness of Land Remediation Relief (LRR), determine whether it is still meeting its objective of boosting development of brownfield land, and obtain a greater understanding of how robust LRR is against abuse.
Consultation approves strengthening HMRC powers on non-compliance
HMRC have published 'Enhancing HMRC's ability to tackle tax advisers facilitating non-compliance — Summary of responses', which found most respondents agreed that HMRC’s powers to tackle non-compliance could be more effective and supported enhancing existing powers.
Consultation response on APR and BPR reforms for trusts
The Government has published a response to its consultation 'Reforms to Inheritance Tax agricultural property relief and business property relief: application in relation to trusts'. A £1m cap on 100% Agricultural Property Relief (APR) and Business Property Relief (BPR) will be introduced from 6 April 2026, with few changes from the original announcements.
Criminal sanctions warranted for promoters of tax avoidance
HMRC have published the outcome of the consultation, 'Closing in on promoters of marketed tax avoidance — summary of responses'. The primary conclusion was that there is a case for introducing a criminal offence for non-compliance with DOTAS obligations.
IHT on pensions consultation response
The Government has published a response to its consultation 'Inheritance Tax on pensions: liability, reporting and payment'. From 6 April 2027, unused pension funds will form part of an individual's estate for Inheritance Tax (IHT) purposes with the Personal Representatives (PRs) becoming liable for the reporting and payment of IHT.
Offshore anti-avoidance legislation call for evidence response
The Government has published a response to its call for evidence 'Personal Tax: Offshore Anti-Avoidance legislation'. It was clear from the responses that further consultation will be needed.
Card data will provide digital nudges for small businesses
HMRC have published the outcome of the consultation, 'Better use of new and improved third-party data'. The reform of HMRC’s bulk-data gathering powers will lead to closer scrutiny of smaller businesses that account for around 60% of the nation's overall tax gap.
Quick News
Agent Update 133: July 2025
HMRC have published their Agent Update for July 2025. We have summarised the key content with links to our detailed guidance on the topics covered, including an update on recent Class 2 National Insurance computation issues.
HMRC tops league table on tax avoidance litigation
HMRC have published their list of tax avoidance litigation decisions for 2024-25. This identifies the results of litigation where HMRC considered that tax avoidance was involved. The summary indicates an almost identical amount of litigation in 2024-25 as in 2023-24, with a stable win rate for HMRC.
Editor's Choice
Legislation Day 2025 (subscribers)
'Legislation Day' (L-Day) was on Monday, 21 July 2025. The Government published draft clauses for Finance Bill 2025-26, along with accompanying explanatory notes, tax information and impact notes, responses to consultations and other supporting documents. This is our detailed subscribers' guide to the announcements and publications.
Guides & Updates
Self-employed
Pre-trading expenses (self-employed)
What are pre-trading expenses? What tax relief is available for pre-trading expenses? What are the restrictions to relief? What expenses will not qualify?
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
Partnerships: Losses
What loss reliefs are available to partners and what restrictions are there? How to calculate a partner's capital contribution? What are the anti-avoidance rules?
Directors & Companies
Tax-efficient extraction of profits: toolkit (2025/26)
This is a general guide and refresher which aims to help a company and its owner decide how company profits are to be extracted based on current tax, rates, reliefs and allowances.
Land Remediation Relief (LRR)
What is Land Remediation Relief (LRR)? Who can claim LRR and what are the conditions? What happens if LRR creates or enhances a loss?
Employers
Employment Allowance
The Employers' National Insurance Contributions (NICs) allowance or Employment Allowance is an allowance given to qualifying employers to offset against their annual Employers' National Insurance liabilities.
Private Client & Estate Planning
Trust Registration Service (TRS)
UPDATE: The Government has published the outcome of its consultation on 'Improving the effectiveness of the Money Laundering Regulations'. Several changes to the TRS are proposed, including new exemptions from registration and an extension to the scope of the TRS to include all non-UK trusts that hold an interest in UK land and property acquired before 6 October 2020.
Trusts & Estates: What’s New 2025/26
UPDATE: In June 2025, HMRC launched a new bereavement helpline for agents and personal representatives to use in respect of informal, non-complex estates.
Investment bonds & tax
How are investment bonds taxed? What is an investment bond? What is a chargeable event gain and how is it calculated? How do notional tax credits work? How is Top Slicing relief calculated? What is deficiency relief?
Capital Allowances
Full expensing & First Year Allowances
What is full expensing? When does it apply and what is the rate of allowance? How are disposals of full expensing assets dealt with? What assets qualify for the 50% First Year Allowance (FYA)? How do I deal with disposals of 50% FYA assets? How do I make a claim?
VAT
Registering for VAT
When should a business register for and charge VAT? What are the VAT registration thresholds? What penalties might HMRC issue for late notification of registration? When do you need to file a VAT return?
Land & Property: Dwellings
What is a dwelling for VAT purposes? What is the VAT treatment for construction, conversion, sale, and letting of a dwelling?
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:
- Monthly Tax Update - July 2025
- Practice Insight - July 2025 (free)
- Monthly Tax Update - June 2025
- Practice Insight - June 2025 (free)
- Making Tax Digital for Income Tax - Roadmap to April 2026
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 July 2025
- HMRC annual statistics round-up
- HMRC ignorant of billionaires' contribution to tax take
- Plans for share digitisation outlined
- Fourteen arrested for phishing attack
- Application to make a late appeal granted
- Currys Retail Ltd liable for £30m degrouping charge
- Mistaken taxpayer had reasonable excuse
- Partnerships: What's new 2025-26? NEW
- Employer's What's On: 2025-26 NEW
- Capital taxes round-up: 2025-26 NEW
- What expenditure qualifies for plant & machinery allowances?
- Groups (VAT)
- Cryptoassets: How are Bitcoin, cryptocurrencies or cryptoassets taxed in the UK? ...More
Subscribe for news, guides, tools & CPD
Subscribe now and unlock the site. Subscriptions begin at £53 (+ VAT) per month. All subscriptions are for a 12-month term.
What do you get?
- A comprehensive practical tax database of guides, checklists, briefings and practice notes, and access to all our time-saving calculators and tax tools.
- 25% discount on Virtual Tax Partner services.
- Read everything in our comprehensive weekly SME tax news summary. We do the reading, then summarise legislation, HMRC guidance, analyse official reports and cherry-pick the best of the press and the rest.
- Commission guides and checklists for your own practice.