SME Tax News

HMRC have published their Agent Update for December 2025. We have summarised the key content, including an update on the mandatory payrolling of Benefits In Kind (BIKs), important reporting requirements for some trusts under the Automatic Exchange Of Information (AEOI) rules, the key changes agents should be aware of in relation to Making Tax Digital (MTD) for Income Tax and important considerations with regard to filing your clients' Self Assessment tax returns for the 2024-25 tax year.

Hello,

In our last update of 2025, we report on an important but little-known 31 December 2025 registration deadline for some trusts and other entities, the December Employer Bulletin, VAT in the context of rotisserie chickens, and Inheritance Tax on Income Tax repayments due to an estate. 

The OECD has released an updated version of the Model Tax Convention on Income and Capital, with clarification around remote working arrangements. The OECD Model incorporates the latest developments in international taxation and provides guidance on interpreting and applying bilateral tax treaties. 

In The Tower One St George Wharf Limited v HMRC [2025] EWCA Civ 1588, the Court of Appeal (CoA) found that a series of transactions involving the grant and transfer of a property lease amongst group companies triggered Stamp Duty Land Tax (SDLT) anti-avoidance provisions.

In Timothy Watts v HMRC [2025] EWCA Civ 1615, the Court of Appeal (CoA) found that Income Tax relief for losses on gilt strips was confined to real economic losses, and could not be generated by fragmenting consideration within a pre-planned avoidance scheme. 

Changes made to the Automatic Exchange of Information (AEOI) regulations earlier this year mean that trusts and other entities considered to be a reporting Financial Institution or a Trustee Documented Trust are required to register with HMRC by 31 December 2025, even if they have no non-UK connections to report. 

In Richard Thomas (as executor) v HMRC [2025] TC09716, the First Tier Tribunal (FTT) found that an Income Tax repayment formed part of a deceased taxpayer’s estate for Inheritance Tax (IHT) purposes.

Hello,

Last Thursday saw the publication of the 2025-26 Finance Bill, which, when passed, will legislate proposals such as the reform of Inheritance Tax and, from next May, the mandatory registration of tax advisers with HMRC.

HMRC have published their Employer Bulletin for December 2025. We have summarised the key content for you, which links to our detailed guidance on the topics covered.