Tax Matters Digest

Over the past year we have seen a marked increase in the scrutiny of employer funded visa expenses by HMRC. What was once an area of relatively settled practice has become a live risk with HMRC advancing a significantly broader interpretation of the Benefit in Kind rules and seeking to collect tax where visa expenses have been met by an employer on behalf of an employee. Our article provides more information on the issue.

Sticking with the theme of employment taxes, we include a reminder about employer reporting for 2025/26, highlighting that the year end is not just about compliance but also gives an opportunity to set future strategy and prepare for changes ahead. Our article highlights compliance deadlines and some of the legislative changes to prepare for.

In a case law update, our next article reviews an Upper Tribunal decision on discovery assessments in HMRC v Harte. The case focussed on how far back HMRC can go when there are several errors in one period which have different causes. The decision will have far reaching implications for how HMRC should handle discovery assessments.

Our final article in this edition is a link to Tim Sarson’s most recent City AM column which argues that, if the Chancellor wants the UK to lead in AI then she must take a look at tax incentives.

We have a number of updates in Other News in Brief:

• HMRC have updated their guidance on tax adviser registration to confirm a deferral for financial services and we set out other critical dates;
• Changes have been made to the Creative Industries Expenditure Credit Manual providing some helpful clarifications on the Video Games Expenditure Credit calculation and guidance on surrendering a credit amount to group companies;
• HMRC have also made changes to the Tonnage Tax Manual to provide clarification that a company which is an operator of ships under the regime will only be taxed as an operator, addressing a potential double tax charge that could arise from a literal reading of the legislation;
• HM Treasury has published a call for evidence looking at potentially phasing out the remaining surplus ACT regime entirely meaning that groups with surplus ACT may only have a three-year window to recover it;
• The Department for Business and Trade has published a consultation on implementing a re-domiciliation regime aimed at making it easier for foreign companies to change their place of incorporation to the UK;
• As we near the introduction of Making Tax Digital for income tax, the final regulations have been published (on 24 March);
• Suggested amendments from the House of Lords to the proposed pension salary sacrifice reforms which will limit the amount of salary sacrifice contributions that can attract NIC relief were rejected by the House of Commons; and
• KPMG’s March 2026 Economic Outlook which looks at the prospects for the UK economy in 2026 and 2027 has been published.

As always, we close out this edition with Indirect Tax Weekly Talking Points which has a round-up of all things VAT, and Week in Tax covering key tax developments from around the world.