Other news in brief

Our earlier article sets out the details of a new requirement for tax advisers to register with HMRC from May 2026 which has much wider application than the description suggests. The regime will impact anyone who ‘interacts’ with HMRC in relation to the tax affairs of a client although some exceptions apply. HMRC have recently updated their guidance on this new requirement to confirm that financial services organisations within scope will not have to register until the end of the year. The guidance now states that “You’ll need to register for an agent services account from 18 May 2026, unless one of the following applies:

• if you already have a Self Assessment or Corporation Tax account, you’ll need to register from 18 August 2026
• if you only provide third-party payroll services on behalf of clients and do not interact with HMRC in any other way, you’ll need to register from 18 November 2026
• if you are a financial services organisation, you’ll need to register from 31 December 2026.”

The guidance was also updated to confirm that intermediaries for the Import One Stop Shop scheme do not need to register if this is their only interaction with HMRC. Details of how to register are still outstanding.

On 20 March 2026, HMRC made two changes to their Creative Industries Expenditure Credit Manual, providing helpful clarification in areas where there was previously some uncertainty. The first change was to page CREC061100 which provides guidance on the first two steps of the Video Games Expenditure Credit (VGEC) calculation. A new section was added on ‘transitional video games’ i.e. video games which switch from Video Games Tax Relief (VGTR) to VGEC in accounting periods beginning on or after 26 November 2025. This new section confirms that companies should deduct non-UK expenditure incurred in accounting periods for which VGEC was claimed, and deduct non-European expenditure incurred in accounting periods for which VGTR was claimed. The second change was to page CREC072000 which provides guidance on surrendering a credit amount to group companies. A new section was added on ‘payments in return for surrendered credit’ which confirms that payments made on or after 26 November 2025 to the surrendering company will be ignored for Corporation Tax purposes as long as the payment does not exceed the amount of credit surrendered.

HMRC have clarified in their guidance in the Tonnage Tax Manual at TTM03100 that a company which is an operator of ships under the UK tonnage tax regime will only be taxed as an operator, addressing a potential double charge that arose from a literal reading of the legislation. Under the UK tonnage tax regime, a company may qualify by virtue of operating qualifying ships – this requires it to own or charter in the vessels and to manage them, strategically and commercially, in the UK. A company may also qualify by virtue of managing ships which are operated by a UK tonnage tax company; in this case the company’s tonnage tax profits are 20 percent of the full amount that an operator would be taxed on. The definition of managing a ship at Para 18A Sch 22 FA 2000 does not require that the manager is not itself the operator, and therefore strictly all operators are also managers (as they must be for their operated ships to qualify). Based on a literal reading, all operators would pay tax on full tonnage tax profits plus another 20 percent of the full tonnage tax profits for being a manager. This is clearly unintended, and HMRC’s guidance resolves the point in practice. It is not known currently if there is an intention to correct the legislation.

As mentioned in the last edition of Tax Matters Digest, the Government has laid regulations to repeal the ‘shadow ACT’ rules from 1 April 2026. Following this, on 19 March 2026, HM Treasury published a call for evidence looking at potentially phasing out the remaining ACT regime entirely. They are investigating April 2029 as a potential date for abolition which would mean that groups have only three years in which to recover any remaining surplus ACT they have. This is not confirmed policy, and the Government will not decide whether repeal will go ahead, or the timing of such repeal, before considering the responses to this call for evidence. The questions to which the Government is seeking answers from affected businesses are:  

• With the removal of the shadow ACT rules, do you anticipate being able to use the remainder of your unrelieved surplus ACT balance and, if so, to what time frame? If not, what is the reason why?;
• Does your ACT balance provide any benefit outside of its use in reducing tax, and what is that benefit? For example, as a deferred tax asset?;  
• What factors influence your ability or decision to use these balances? Are there structural issues within your group which prevent your business accessing ACT?;
• What impact would the removal of the ACT regime on 1 April 2029 have on your business? Is there another date that would be preferable? If so, why?;
• Are there any consequences of not taking action to change the regime that the Government should consider?; and
• How do you assess the benefits of removal of ACT? Are there any consequences of abolishing the regime that the Government should consider?

Responses are requested by 11 June 2026 to the following email address: ACTreformconsultation@hmtreasury.gov.uk.

On 25 March 2026, the Department for Business and Trade published a consultation on implementing a re-domiciliation regime which is aimed at making it easier for foreign companies to change their place of incorporation to the UK. The proposals are based on recommendations from an Independent Expert Panel and follow an initial consultation in 2021 but are limited to inbound domiciliation only. The Government is not proceeding with an outward regime, so will not allow UK companies to move from the UK. This latest consultation covers many areas and only contains a short section on changes that may be required to tax legislation which refers back to the 2024 conclusions of the Expert Panel (in Section 6 of their report). The Panel were clear that they had not addressed any industry specific matters and that their conclusions would need to be updated for subsequent changes to tax legislation. The consultation “welcomes any comments on the Panel’s considerations” and also asks one specific question about a potential Stamp Duty Reserve Tax double charge for overseas companies whose shares are traded through depositary interests. An online survey has been published and responses have been requested by 19 June 2026 (the email address provided is corp.redom@businessandtrade.gov.uk).

MTD for income tax became mandatory for in scope landlords and sole-traders (those with qualifying income above £50,000) from 6 April 2026. The detailed rules are set out in The Income Tax (Digital Obligations) Regulations 2026 that were published by the Government on 24 March 2026, following earlier publication of a draft last July. Taxpayers within scope must now keep their records digitally and use MTD‑compatible software to send HMRC quarterly updates of income and expenses and file their annual end of year Tax Return declaration. MTD is being rolled out gradually and those with qualifying income over £30,000 will be mandated from April 2027 and over £20,000 from April 2028. However, there are a number of exemptions and deferrals confirmed in the regulations, including a temporary exemption for 2026-27 for non-UK residents, dual residents and individuals entitled to split year treatment.

The National Insurance Contributions (Employer Pensions Contributions) Bill provides for a cap from 2029/30 on pension salary sacrifice contributions that attract NIC relief. In the last edition of Tax Matters Digest, we discussed some amendments to the Bill made by the House of Lords which would have had a significant impact on the proposals if implemented. As expected, the House of Commons objected to all the amendments when it considered them on 23 March 2026. Because the Commons has primacy on financial matters (known as ‘financial privilege’) the House of Lords was unable to insist on its amendments and they were withdrawn on 25 March. The Bill is therefore final and, at the time of writing, was awaiting a date for Royal Assent.

KPMG UK’s economics team have published their latest Economic Outlook for the UK looking at the prospects for the UK economy in 2026 and 2027 including analysis of growth prospects, energy prices, inflation, interest rates, consumer spending, wage growth, investment, the labour market and public finances.