Hello,
On 4 November, the Chancellor gave an unprecedented pre-Budget ‘Scene Setter’ speech. This felt somewhat like the typical preamble we are accustomed to on Budget Day itself, immediately before announcements are made.
Rachel Reeves acknowledged that there has been much speculation around the choices that will be made, but provided little detail as to what they may be, with the word ‘tax’ only featuring in her speech three times. She said, “If we are to build the future of Britain together, we will all have to contribute to that effort”. It would seem likely that this is a strong hint at tax rises.
The Chancellor indicated the upcoming Budget will support businesses to create jobs and innovate. She emphasised that decisions on tax and spending will be made to control debt, protect public services from austerity, and protect families from high inflation and interest rates. All of this was said in the context of the Government's overarching 'ironclad' commitment to its fiscal rules.
Turning away from the Budget, the Administrative Burdens Advisory Board (ABAB) has published its annual report. The ABAB aims to ensure that HMRC better understands the needs of small businesses when engaging with the tax system.
This report reveals that while there is increasing awareness of Making Tax Digital (MTD) for Income Tax (IT), a clear majority believe that both keeping digital records and submitting quarterly updates will result in increased time and costs to manage. Some 65.2% of respondents felt there were no benefits to MTD for IT. This comes in the week that HMRC have begun sending MTD for IT mandation letters to taxpayers who will be impacted from April 2026.
In terms of cases, the John Boulting v HMRC First Tier Tribunal (FTT) decision is one to highlight. Here, HMRC argued that a company's Purchase of Own Shares (POS) was not necessary to benefit its trade and was instead undertaken to reward the exiting shareholder, due to the company already being profitable and growing. In addition, HMRC argued that the shares were valued excessively. This is an area where there is limited case law, making the FTT’s analysis essential reading for anyone dealing with such transactions.
More news, cases, and updates below.
The rossmartin.co.uk tax team
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Quick News
HMRC now sending MTD mandation letters
With the introduction of Making Tax Digital (MTD) for Income Tax (IT) less than six months away, HMRC have begun writing to taxpayers who will be mandated into the regime from 6 April 2026.
Legislative proposals consultation relating to Welsh Tax Acts
The Welsh Revenue Authority has launched a consultation on legislative proposals relating to the Welsh Tax Acts. Views are being sought on proposals aimed at clarifying the application of tax in specific areas.
ABAB report finds slight improvement in interaction with HMRC
The Administrative Burdens Advisory Board (ABAB) has released its 'Tell ABAB report 2024 to 2025'. This demonstrates increasing levels of awareness around Making Tax Digital (MTD) for Income Tax, poor channels of communication with HMRC and a slight improvement in 'customer experience'.
Tax Cases
POS trade benefit test met
In John Boulting v HMRC [2025] TC09673, the First Tier Tribunal (FTT) found that a Purchase of Own Shares (POS) was carried out wholly or mainly for the purpose of benefiting a company’s trade.
Cosmetic treatments VAT case remitted to FTT
In Illuminate Skin Clinics Ltd v HMRC [2025] UKUT 341, the Upper Tribunal (UT) found that the First Tier Tribunal (FTT) had made an error of law when considering the medical exemption for VAT. The FTT had failed to give sufficient consideration to the documents which evidenced a diagnosis, by the clinic's doctor, of any health disorders.
Property development input VAT recovery denied
In SM Developments North West Ltd v HMRC [2025] TC09665, the First Tier Tribunal (FTT) found that input VAT could not be recovered on a property development as the invoices for supplies received predated the effective date of registration.
Editor's Choice
Business Investment Relief (BIR)
Business Investment Relief (BIR) is a relief for formerly non-UK domiciled individuals, designed to encourage them to remit funds to invest in UK businesses. The abolition of the non-domicile regime has brought changes to BIR for both existing and future investments. Ultimately, the relief will cease from 5 April 2028.
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?
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 over time by the courts to decide when an activity is a trading or investment activity.
Influencers: Tax Overview
What expenses can online influencers claim for tax purposes? How is their income taxed? Are there special tax or accounting rules for influencers? What are the VAT rules for online influencers?
Directors & Companies
Loan stock: QCBs or Non-QCBs
What is the difference between a Qualifying Corporate Bond (QCB) and a non-QCB? Which is better and why?
Mutual trading, members' clubs and community trades
How are mutual traders, members' clubs, associations and community trades treated for tax purposes?
Employers
Medical benefits and health checks
What are the tax implications if an employer provides an employee with a medical health check and associated medical treatment?
Pool cars
What is a pool car? How is it taxed? When does it become a benefit? What are the rules? Is it still worth having them?
Private Client & Estate Planning
Pensions: Tax rules and planning
What tax rules apply to pensions? What tax relief is available? What tax charges can arise? What planning opportunities are there?
IHT: Gifts with reservation
What are the Gift With Reservation (GWR) rules? When do they apply?
Post Office Horizon Compensation & Tax
As part of the fallout of the Post Office Horizon scandal, many sub-postmasters and sub-postmistresses are receiving compensation. How are these receipts taxed?
Capital Allowances
Structures & Buildings Allowance (SBA)
Who can claim the Structures and Buildings Allowance? What expenditure is eligible? How to make a claim?
Land & Property
Profits from dealing in or developing UK land
These rules apply UK Income Tax or Corporation Tax to all profits from trading in and developing UK land, regardless of your country of residence.
Penalties & Compliance
Discovery Assessments: SDLT
When can HMRC issue a Stamp Duty Land Tax (SDLT) assessment outside of the normal statutory time limits? What conditions must be met?
Client guide: Reasonable care and tax penalties
What triggers a tax penalty? What standard of care is expected from a taxpayer? What is reasonable care? When is an error careless?
Tax debts and insolvency
This guide summarises the treatment of tax debts to HMRC in insolvency cases.
VAT
Staff, Bureaux or Agencies and VAT
What are the VAT issues when an employer supplies services to an employee or vice versa?
Business splitting and VAT (single business directions)
What measures can HMRC take when they identify that a business has been artificially split into two or more entities to trade below the VAT registration threshold?
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.
Continuing Professional Development (CPD)
Recent and upcoming webinars include:
- Practice Insight - November 2025 (free)
- Monthly Tax Update - October 2025
- Practice Insight - October 2025 (free)
- Monthly Tax Update - September 2025
- 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, reorganisations and much more.
Missed the Last Tax Update?
Ross Martin Tax: SME Tax News 30 October 2025
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