Hello,
It has been another busy week in tax, with news of HMRC cutting back on Corporation Tax letters, an update on the recovery of Winter Fuel Payments through the tax system and more AI hallucinations. This time, three made-up cases were cited by a taxpayer before the Upper Tribunal, due to the use of AI.
Our case summaries are not all about AI, however. In Millennium Cash & Carry Ltd v HMRC, we look at the first Soft Drinks Industry Levy (SDIL) appeal before a tribunal. SDIL, or the ‘sugar tax’, is a relatively new levy which was introduced from 6 April 2018, applying to UK-produced or imported soft drinks containing added sugar.
The First Tier Tribunal (FTT) was tasked to consider whether HMRC had the power to assess a taxpayer where it had been determined that there was no entitlement to SDIL credits that had been claimed. Its decision makes for interesting reading.
In other news, back in June, it was announced that state pensioners would, later this year, benefit from a Winter Fuel Payment (WFP), but that it would be recovered in full by HMRC where individual (not household) incomes are over £35,000.
Further details on how this will work in practice have now been published, along with an online tool for taxpayers to assess whether they will exceed the £35,000 threshold and, if they do, ascertain how HMRC will recover the money. An estimated two million pensioners will be subject to WFP recovery via the tax system. Individuals who know they will not be entitled to retain their WFP may wish to consider opting out of receiving it; this must be done by 15 September 2025.
More news, cases and updates below.
More news and updates below.
The Ross Martin Tax Team
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Quick News
Update on Winter Fuel Payment recovery
It was previously announced that eligible individuals would automatically receive the Winter Fuel Payment (WFP) for 2025-26, but it would be recovered by HMRC when a person's income exceeded £35,000. HMRC have published updates on how WFP recovery will work in practice.
Paper Corporation Tax reminders to stop
As part of HMRC's efforts to improve its services by sending and receiving taxpayer information digitally, they are no longer sending CT208 Corporation Tax reminder letters on a trial basis.
Statistics show drop in CGT tax take despite relief cut
HMRC have published 'Capital Gains Tax statistics' which show that despite the halving of the annual tax-free allowance from £12,300 to £6,000, the tax take fell by 18% in 2023-24.
Tax Cases
Sugar tax credits retained, despite no entitlement
In Millennium Cash & Carry Ltd v HMRC [2025] TC09583, the First Tier Tribunal (FTT) found that a company could retain Soft Drinks Industry Levy (SDIL) credits it had claimed, despite not being entitled to them. HMRC had no free-standing power to assess or withdraw credits claimed in periods in which there was no SDIL due.
Misuse of AI in SEISS Upper Tribunal appeal
In HMRC v Marc Gunnarsson [2025] UKUT 247 (TCC), the Upper Tribunal (UT) found that Self-Employment Income Support Scheme (SEISS) claims by a director of a limited company were incorrect. He was required to repay the amounts claimed.
Caregiver's PRR claim accepted on multiple disposals
In Mark Campbell v HMRC [2025] TC09585, the First Tier Tribunal (FTT) accepted a taxpayer's claim to Private Residence Relief (PRR) on the disposal of multiple properties under the job-related accommodation rules, whilst living in his parents' home.
Tax adviser’s carelessness costs their client
In Abbotsford Property Group Limited & Anor v Revenue Scotland [2025] FTSTC 9, the First Tier Tribunal (FTT) for Scotland upheld assessments and penalty notices for Land and Buildings Transaction Tax (LBTT) due to the carelessness of the tax adviser, both in providing inaccurate advice and failing to disclose in a timely way.
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