Hello,
This week brings a run of interesting decisions from the tribunals, with an overdrawn director’s loan account, corporate residence, and the Disclosure of Tax Avoidance Scheme (DOTAS) rules being examined in our case summaries.
Our full analysis of the decision in HMRC v Gary Quillan, below, is an important read for those in practice. This case concerned an insolvent company in which the director had an overdrawn loan account, only part of which was settled during the liquidation process. The question considered by the Upper Tribunal (UT) was whether the balance of the loan account, which the liquidator had not recovered, had been written off, such that an Income Tax charge arose on the director.
The UT’s decision found in favour of HMRC, overturning the outcome from the First Tier Tribunal. Although the debt had not been formally released, the UT held that the liquidator's conclusion that there was no recoverable value in the outstanding balance was itself sufficient to constitute a write-off.
This week’s news doesn’t just come from the tribunals, as we also look at the number of taxpayers that filed their first quarterly updates under Making Tax Digital (MTD) for Income Tax, following last week's deadline. It appears that around one third of taxpayers who should have been in MTD from April 2026 have not yet signed up, causing HMRC to take matters into their own hands.
As we continue to expand our subscriber resources, this week we have published three new guides. These explore Quick Succession Relief for Inheritance Tax, as well as the tax implications of trading stock being transferred to fixed assets, and vice versa. This is a common issue in practice, as business plans are rarely static; our guides outline the pitfalls and planning opportunities.
More news, cases and updates below, including details of a new online service which allows taxpayers and agents to upload documents directly to HMRC as part of a compliance check.
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Autumn Budget 2026: Analysis, Client Newsletter & Webinar
This year's Budget on 28 October will be significant: it will be the first delivered by Chancellor John Healey, coming just months into Andy Burnham's tenure as Prime Minister.
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Quick News
436,000 taxpayers file under MTD for Income Tax
HMRC have issued a press release confirming that 436,000 taxpayers have filed their first quarterly tax update under Making Tax Digital (MTD) for Income Tax, reminding those who have not yet submitted their returns to do so now.
Employment-Related Securities Bulletin 68: August 2026
HMRC have released Employment-Related Securities (ERS) Bulletin 68, which focuses on changes to ERS net settlement reporting requirements, Save As You Earn (SAYE) guidance and Enterprise Management Incentives (EMI).
New online service for uploading compliance check documents
HMRC have introduced a new online service which allows taxpayers and their appointed agents to upload documents to HMRC electronically as part of a compliance check.
Independent report published on post-OTS progress on tax simplification
An independent report has been published by the University of London, 'Tax complexity: impact on UK competitiveness and growth'. It revisits the Office of Tax Simplification (OTS) 2014 review of the competitiveness of the UK’s tax administration, seeking to assess progress made since that date.
Tax Cases (subscription content)
UT finds director's loan was written off during liquidation
In HMRC v Gary Quillan [2026] UKUT00300, the Upper Tribunal (UT) confirmed that for the purposes of s.415 ITTOIA 2005, an overdrawn director's loan account can be treated as 'written off' during the liquidation process without the need for a formal release or express write-off.
Property incorporation schemes not notifiable under DOTAS
In Property 118 Ltd & Anor v HMRC [2026] TC09971, the First Tier Tribunal (FTT) cancelled Disclosure of Tax Avoidance Scheme (DOTAS) reference numbers issued by HMRC for two property incorporation schemes. They were not notifiable arrangements as their main purpose was not to obtain a tax advantage.
Beneficiary makes trust-owned offshore company UK tax resident
In Cogefin (Bermuda) Limited & Anor v HMRC [2026] TC09969, the First Tier Tribunal (FTT) found that a Bermudian incorporated company owned by a trust was UK tax resident. Central management and control was exercised by a UK resident beneficiary despite the company directors all being resident in Bermuda.
Editor's Choice
This week's Editor's Choice was selected by Rachel Davies. You can meet our team of editors and writers here: Meet the team.
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?
Electric Vehicles: Update 2026
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.
R&D: Advance Assurance
What are Research and Development (R&D) targeted and full claim advance assurance? How can I apply? What are the conditions? What are the benefits?
Guides & Updates
New This Week
Appropriations to and from trading stock (self-employed and partnerships)
What happens when assets become trading stock? What happens when trading stock becomes a fixed asset, or is taken out of the business for another purpose? What elections are available? When should an asset be reclassified?
Appropriations to and from trading stock (companies)
What happens when a company moves a fixed asset into trading stock? What happens when a company begins to use trading stock for another purpose? What elections are available? When should assets be reclassified?
Quick Succession Relief
What is Quick Succession Relief (QSR)? When does QSR apply? How is QSR calculated? How is QSR claimed?
Self-employed
Website and e-commerce costs
What tax relief is there for the costs relating to designing, creating, and maintaining a website, software or e-commerce development?
Partnerships
Partnerships: Capital Gains Tax
How does Capital Gains Tax (CGT) work for partners and partnerships? What is HMRC’s Statement of Practice D12? How are transactions between partners treated? What if the partners are connected persons for CGT?
Directors & Companies
Valuation: Companies
When might a tax valuation be required? What are the main principles in valuing unquoted companies?
Employers
Agency workers: Umbrellas & anti-avoidance PAYE rules
What is an umbrella company? Who is responsible for operating PAYE in labour supply chains? What is the new legislation for umbrella companies? How will this affect existing labour supply chains?
Trivial benefits
What are trivial benefits? What is included? What are the caps?
Capital Allowances
Disposal values & rules
What is a disposal for capital allowance purposes? What is the tax consequence of a disposal? What value needs to be accounted for on a disposal?
Private Client & Estate Planning
Voluntary National Insurance Contributions (Class 2 and Class 3)
What are voluntary Class 2 and Class 3 National Insurance Contributions (NICs)? Why might it be desirable to pay voluntary NICs and who can pay them? How do you check your NICs record? How do you check your state pension entitlement? How do you pay voluntary NICs?
Trust Registration Service
What is the Trust Registration Service? What trusts does it apply to? What are the requirements and deadlines?
More Tax Guides
Finance Acts 2026-27: tax update and Rolling Tax Planner
This rolling planner tracks the key tax announcements that impact the 2026-27 tax year and beyond. This planner is updated on an ongoing basis.
Named tax avoidance schemes, promoters, enablers
HMRC publish a list of named tax avoidance schemes, promoters, enablers and suppliers. It is not recommended that taxpayers use any of these schemes, as HMRC do not consider that they work and you may end up with a significant tax liability if you engage with the scheme suppliers. HMRC's list was last updated on 30 July.
VAT
Capital Goods Scheme
What is the VAT Capital Goods Scheme (CGS)? When do I use it? How does it work?
Continuing Professional Development (CPD)
Recent and upcoming webinars include:
- Monthly Tax Update - September 2026
- Practice Insight - July 2026 (free)
- Monthly Tax Update - July 2026
- Capital Gains Tax Planning Strategies to Maximise Net Proceeds (free)
- 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
Need Tax Support?
Virtual Tax Partner© Support
Have a tax query? Need a second opinion? 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 6 August 2026
- Date announced for 2026 Budget
- Has HMRC changed its view on interest relief for replacement capital?
- Incorrect pension tax treatment may result in double tax relief
- Autumn Budget 2026 representations invited
- Employment-Related Securities Bulletin 67: July 2026
- The 'life' of a company for IHT
- Unsuccessful appeal for BPR on serviced offices
- FTT rejects HMRC's strike-out appeal in BADR dispute
- Share matching rules for individuals and companies ...More
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