News & Insights

The latest tax developments and VAT round-up for the month.

Our monthly tax update covers the developments most likely to affect individuals, trusts, estates and businesses. If you would like to discuss anything here in more detail, please get in touch with your usual contact.

1. Private client

1.1 Renters’ Rights Act: no SDLT for tenants on assured tenancies

The government has confirmed that tenants will not have to pay SDLT on the rent under residential assured tenancies, following changes made by the Renters’ Rights Act 2025.

From 1 May 2026, most fixed-term residential tenancies became assured periodic tenancies. For SDLT, a periodic tenancy is treated as a lease that grows by a year at each anniversary. Over time, the total rent could have exceeded the £125,000 threshold and created an unexpected SDLT bill for ordinary tenants.

A ministerial statement on 22 April confirmed that Finance Bill 2026-27 will remove the SDLT charge on the rent element of these tenancies. In the meantime, HMRC will not collect SDLT on them. Landlords and letting agents can reassure tenants that no action is needed.

CIOT: Renters’ Rights Act and SDLT on residential leases

1.2 Temporary repatriation facility: how it applies to trusts

HMRC has clarified how the Temporary Repatriation Facility applies where foreign income and gains are held in trust structures.

The facility lets former remittance basis users bring pre-April 2025 foreign income and gains into the UK at a reduced rate for a limited period. Its interaction with offshore trusts is complex, particularly where amounts are matched to distributions or benefits. Settlors and beneficiaries of offshore trusts who are considering using the facility should take advice before any distribution is made.

2. PAYE and employment

2.1 Premier League referees not employees, says FTT

In the latest stage of a long-running case, the FTT has decided that referees engaged by Professional Game Match Officials Ltd (PGMOL) for individual matches were not its employees.

The case went to the Supreme Court, which sent it back to the FTT to decide, taking all the circumstances into account, whether the individual engagements were employments. Applying the Supreme Court’s guidance, the FTT concluded that the referees were self-employed for those engagements, so no PAYE or NIC was due.

The decision is a reminder that employment status depends on all the facts, including control and the obligations on each side. Businesses that engage individuals on a match-by-match or job-by-job basis should document the arrangements carefully and review them periodically.

Professional Game Match Officials Ltd v HMRC (FTT, May 2026)

ICAEW: referees found to be self-employed

2.2 Salary sacrifice for pensions: NIC cap ahead

From April 2029, National Insurance relief on pension contributions made through salary sacrifice will be capped at £2,000 a year per employee, as announced at Budget 2025.

Contributions above the cap will attract employer and employee NICs. Employers with generous salary sacrifice schemes, and higher earners who sacrifice large amounts, should model the effect now so that any changes to reward packages can be planned well ahead.

2.3 Employment Allowance guidance updated

HMRC has updated its guidance on who can claim the Employment Allowance and how to claim it.

The allowance reduces an employer’s Class 1 secondary NIC bill each year. Some employers cannot claim, including companies whose only paid employee is a director, and connected companies can only claim once between them. Employers should check their eligibility at the start of each tax year rather than claiming automatically.

3. Business tax

3.1 Film partnership partly succeeds on trading status

The FTT has partly allowed an appeal by a film and television partnership, accepting that it was trading.

Trading status matters because it decides whether partners can claim relief for losses. The tribunal accepted the partnership was carrying on a trade, though not every aspect of the appeal succeeded. The case shows the value of clear commercial evidence about how a business operates.

Take 3.9 TV Partnership v HMRC (FTT, May 2026)

3.2 HMRC warns about misleading online and AI advice

HMRC has warned that some online sources, including AI tools, are giving taxpayers wrong information about VAT return deadlines.

Missing a deadline can lead to penalty points and late payment interest. Businesses should rely on HMRC guidance or their adviser for filing dates, and check the deadlines shown in their own VAT online account.

3.3 Investment managers: updated statement of practice

HMRC has updated its statement of practice on the investment manager exemption for overseas clients.

The exemption lets non-resident investors use a UK investment manager without being treated as trading in the UK through that manager, provided certain conditions are met. UK fund managers with overseas clients should check that their arrangements still meet the updated conditions.

4. VAT and indirect taxes

4.1 Public EV charging: HMRC appeals reduced rate decision

HMRC has confirmed in Revenue and Customs Brief 4 (2026) that it is seeking to appeal the FTT’s decision that some public EV charging can be reduced-rated.

In Charge My Street, the FTT accepted that electricity supplied at public charge points could qualify for the 5% rate where supplies to identified customers did not exceed 1,000 kWh a month. HMRC maintains that public EV charging is standard-rated. Charge point operators should keep the issue under review and consider whether to submit protective claims, while recognising that the outcome is uncertain.

Revenue and Customs Brief 4 (2026)

4.2 Hampers: wicker basket shared the VAT rate of its contents

The FTT has held that a lidded wicker basket in a food and drink hamper was ancillary to the contents, so it was not a separate standard-rated supply.

The tribunal looked at the hamper from the point of view of the average customer, who buys it for the food and drink rather than the basket. The decision is helpful for gift and hamper businesses, though each case turns on its own facts.

Clearwater Hampers Ltd v HMRC [2026] UKFTT 567 (TC)

4.3 Kittel penalties reduced for a director without prior knowledge

The FTT has partly allowed an appeal against denial of input tax under the Kittel principle, substantially reducing the penalties.

The tribunal took account of the director’s lack of knowledge before HMRC’s intervention. Businesses should keep evidence of the checks they carry out on suppliers, because it can affect both the tax outcome and any penalties.

Sweetmotion Ltd v HMRC [2026] UKFTT 657 (TC)

5. Key dates

P60s must be given to employees by 31 May, and the first Making Tax Digital quarterly updates for income tax are due on 7 August.

6. And finally

6.1 Remember the dog licence?

Until 1987, dog owners in Great Britain had to buy a licence. The fee had been set at 7s 6d in the 19th century and, after decimalisation, became 37½p. By the time it was scrapped, collecting it cost far more than it raised.

It is a useful reminder that small, long-forgotten charges can outlive their purpose. With the Autumn Budget expected later this year, we will be watching for any spring-cleaning of the tax system.