Hello,
This week, a firm date finally lands for the Capital Goods Scheme simplification, agents get a timely steer ahead of the first round of MTD quarterly filings and HMRC admits to a calculation error that’s been running since 2010. Add a fresh consultation and Legislation Day's draft legislation, including new rules for taxing stablecoins from April 2027, and there is plenty to keep agents busy.
For those who have been waiting for the long-promised simplifications to the VAT Capital Goods Scheme, the changes will finally take effect on 29 July 2026. Businesses subject to the scheme, typically those with significant capital expenditure on land, buildings and computer equipment, should see a reduced compliance burden, including simpler recordkeeping.
With many sole traders and landlords due to file their first Making Tax Digital (MTD) quarterly return by 7 August 2026, HMRC have published a special MTD edition of their Agent Update. It contains some timely reminders, including the point that a quarterly update is not a tax return, so there is no need to make accounting or tax adjustments before submission. The edition also highlights several practical steps that agents should take before filing.
Some 3.1 million pensioners may have overpaid small amounts of tax in 2024-25 due to an HMRC system error dating back to 2010. HMRC have assured the Public Accounts Committee that a fix will be delivered this summer, correcting calculations for 2025-26 and future tax years. In the meantime, it may be worth considering whether to amend Self Assessment tax returns, where that's possible, or to contact HMRC about potential refunds.
The government’s consultation programme continues at pace. A follow-up consultation on Land Remediation Relief proposes reforms intended to make the relief more effective. This could be worth flagging to clients undertaking contaminated or derelict land projects.
This week also saw Legislation Day, where draft legislation was published, ready for Finance Bill 2026-27. Part of this sets out how stablecoins will be taxed for individuals, trustees and companies. Those holding or transacting in stablecoins will want to be aware of the proposed changes ahead of their planned introduction in April 2027. We will have more coverage of Legislation Day next week.
More news, cases and updates below, including a case examining whether a payment made to a whistleblower fell within the termination payment rules.
Online PRACTICAL tax resources for accountants and tax advisers BY accountants and tax advisers.
Quick News
Response to call for evidence on the Taxation of Stablecoins
HMRC have published responses to its call for evidence, 'The Taxation of Stablecoins', which explored how this cryptoasset should be taxed for individuals and companies. Draft legislation has been published setting out the likely changes that will take effect from April 2027.
Agent Update: Making Tax Digital for Income Tax
HMRC have published a special Making Tax Digital (MTD) edition of their Agent Update. We have summarised the key content, including reminders, videos and resources that you may find useful.
Capital Goods Scheme simplified from July 2026
HMRC have confirmed simplification changes to the Capital Goods Scheme (CGS) will take effect on 29 July 2026. Computers will be removed from the scheme, while the threshold for land, buildings and civil engineering works will increase from £250,000 to £600,000.
HMRC apologises for State Pension tax calculation error
HMRC have disclosed a long-running error in their systems that has led many pensioners to pay small amounts of excess tax. The issue dates back to 2010 and may have affected as many as 3.1 million pensioners in 2024-25. Affected taxpayers are invited to contact HMRC or, where possible, amend their Self Assessment tax return.
Second consultation on Land Remediation Relief reforms
The government has published a second consultation on potential options to reform Land Remediation Relief (LRR). Proposals would change the timing of relief, align eligible contamination expenses with planning processes and update the rules for long-term derelict land.
One-to-many letters: Tracker
HMRC's latest one-to-many 'nudge' letter targets taxpayers who made a provisional claim for Rollover Relief in their 2022-23 tax return, but have not subsequently replaced it with a final claim.
Tax Cases (subscription content)
No MDR as mobile home is a chattel
In Matthew Lambourne & Anor v HMRC [2026] TC09942, the First Tier Tribunal (FTT) held that a separate habitable unit was a chattel, not part of the land. Multiple Dwellings Relief (MDR) did not apply, but its value was not part of the chargeable consideration for Stamp Duty Land Tax (SDLT).
Whistleblower's compensation taxable
In Ben Everson v HMRC [2026] TC09933, the First Tier Tribunal (FTT) found that a payment under a compromise agreement with a whistleblowing employee was taxable as earnings. It did not matter why the payment was made; it arose from the termination of the employment, so only £30,000 was tax-free.
UT narrows VAT exemption on dental prostheses
In HMRC v Align Technology Switzerland GmbH & Anor [2026] UKUT 00256, the Upper Tribunal (UT) reversed the decision of the First Tier Tribunal (FTT), holding that orthodontic aligners do not qualify for VAT exemption as dental prostheses.
Editor's Choice
This week's Editor's Choice was selected by Andie Ross. You can meet our team of editors and writers here: Meet the team.
Statutory Payments: Employer's guide
What statutory payments are available to employees? When are they due, how should they be calculated, and how much can be recovered from HMRC?
Foreign income and residency pages: FAQs
How do you complete the foreign and residency pages of the Self Assessment return?
Globally mobile employees: Pension contributions relief for overseas employees
Can non-UK resident employees contribute to a UK pension scheme? Can UK resident employees contribute to an overseas pension scheme? What UK tax relief is available? Can pension funds be transferred from a UK pension scheme to an overseas pension scheme? How are payments from non-UK pension schemes taxed?
Guides & Updates
Self-employed
MTD: Toolkit for accountants
What is the current timetable for Making Tax Digital (MTD)? When will MTD for Income Tax become mandatory? How will it work? Which clients will be excluded? What planning needs to be undertaken?
Checklist: Year-end Accounts & Tax (self-employed)
This is a checklist to assist you in preparing accounts and completing the Self-Employed section of a Self Assessment tax return, highlighting key areas for discussion with your sole trader clients.
Directors & Companies
Companies: Permanent establishment & residence
What are the rules for determining a company's country of residence? What is central management and control? When does a company create a permanent establishment in another country?
Employers
Electric Vehicles: Update 2026
UPDATE: With the increased focus on achieving Net Zero, the government is planning to ban new petrol and diesel car sales by 2030. We review some tax issues that businesses and their employees may consider when acquiring or providing an electric vehicle.
Termination, redundancy and leaving payments
How are redundancy and termination payments taxed? What amounts can be paid tax-free? What amounts are taxable as earnings?
Private Client & Estate Planning
Cryptoassets: How are Bitcoin, cryptocurrencies or cryptoassets taxed in the UK?
How do you tax Bitcoin? Are cryptocurrency or cryptoasset gains or profits taxable? Can you obtain tax relief if you make losses on Bitcoin? Gains on transactions in cryptoassets are potentially taxable in the same way as other investments.
Trusts & Estates: Ten-year charge reporting requirements
What is the ten-year charge (or principal or periodic charge) and when does it apply?
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?
Capital Allowances
Short-life assets
What is a short-life asset? How to plan for short-life assets, what can be included and what are the exceptions?
Land & Property
Furnished Holiday Letting (FHL): Abolition of the regime briefing
The Furnished Holiday Letting (FHL) regime was abolished in April 2025. We consider the practical impact of losing the FHL rules and provide some essential planning points.
VAT
Groups (VAT)
What are the conditions for forming a VAT group? What rules apply once a VAT group is in place?
Land & Property: Relevant residential & relevant charitable purpose
What are the VAT rules for land and property that is used for a relevant residential purpose or a relevant charitable purpose? What are the clawback provisions affecting a change of ownership or use?
Continuing Professional Development (CPD)
Recent and upcoming webinars include:
- Practice Insight - July 2026 (free)
- Monthly Tax Update - July 2026
- Capital Gains Tax Planning Strategies to Maximise Net Proceeds (free)
- Practice Insight - June 2026 (free)
- Monthly Tax Update - June 2026
- Mandatory HMRC Agent Registration Part 2 - Where We Are Now
- Mandatory HMRC Agent Registration Part 1 - Getting Started Before May 2026
- Ethics and PCRT for Tax Advisors
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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 Update 9 July 2026
- Progress update on HMRC's Transformation Roadmap
- CCAB weighs in on ethical AI use
- Proposed offence for reckless, untrue statements for direct taxes
- Consultation on tackling lower-value tax debts
- More List 3 updates on approved organisations and societies
- Consultation on VAT treatment of land for social housing builds
- Consultation on extending VAT online marketplace liability
- Consultation on new First Time Buyer ISA
- New proposals to tackle Electronic Sales Suppression
- Help to Save Reform consultation response
- Supreme Court narrows 'significant influence' test in salaried member rules
- £34m payment to clear loans disallowed by UT
- Incorporation: Property business/Buy-to-let
- Loan relationships: Connected Companies
- IHT: Gifts with reservation ...More
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