HMRC have added Synthesised text of the Multilateral Instrument and the 2010 UK- Hong Kong Double Taxation Agreement, the 2013 UK-China Double Taxation Agreement and Protocol and the 1996 UK-Latvia Double Taxation Convention, to the collection of published tax treaties on their website. The synthesised text reflects the changes made to those treaties by the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (commonly known as the Multilateral Instrument or MLI).
Synthesised text of the Multilateral Instrument and UK-Hong Kong, UK-China, UK-Latvia Double Taxation Convention published
New Exchequer Secretary to the Treasury following government reshuffle
On 1 September 2025, the Prime Minister announced some ministerial changes resulting in a new Exchequer Secretary to the Treasury, the Minister with responsibility for tax. Daniel Tomlinson MP has been appointed into this role, replacing James Murray MP who held the position since the General Election last year. Murray has moved up into the role of Chief Secretary to the Treasury.
Consultations published on EU CBAM implementation
On 29 August 2025, the European Commission (EC) published three consultations on the EU Carbon Border Adjustment Mechanism (CBAM):
- CBAM certificates – adjustment of obligation to surrender them to take account of free ETS allowances which sets out detailed rules on how the CBAM certificates to be surrendered by authorised CBAM declarants must be adjusted to reflect the extent to which EU Emissions Trading System (ETS) allowances are allocated free of charge;
- CBAM methodology for the definitive period starting on 1 January 2026 which seeks to clarify key technical aspects in relation to the final ‘definitive’ CBAM regime which commences on 1 January 2026; and
- CBAM – carbon price paid in a third country which will set out rules for converting into a corresponding number of CBAM certificates the carbon price paid in a third country for declared embedded emissions, taking into account any form of compensation available in that country resulting in a reduction of the price.
All three consultations are open for comment until 25 September 2025.
HMRC late payment interest rates revised after Bank of England reduces base rate
On 7 August 2025, the Bank of England Monetary Policy Committee reduced the Bank of England base rate to 4.00 percent from 4.25 percent. As a result, HMRC interest rates for late and early payments have also reduced. HMRC’s late payment interest rate for most taxes is set at the Bank of England base rate plus 4 percent (from 6 April 2025 when there was a general uplift), so their late payment interest rate reduced from 8.25 percent to 8.00 percent. Interest charged on underpaid quarterly corporation tax instalment payments is calculated as base rate plus 2.5 percent (again from 6 April 2025), so this reduced to 6.50 percent. These changes came into effect on 18 August 2025 for quarterly instalment payments and on 27 August 2025 for other late payments. HMRC also reduced their repayment interest rate for most taxes to 3.00 percent, as it is set at Bank Rate minus 1 percent, with a 0.5 percent lower limit. For interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments the rate became 3.75 percent.