Other news in brief

HMRC have reviewed and updated their ERS year-end return templates, guidance and technical notes. The current reporting templates should continue to be used to submit or update ERS returns up to and including 5 April 2027. The new templates must be used to submit all ERS returns, including late or updated returns for earlier years, on or after 6 April 2027. The current templates will no longer be accepted by HMRC’s online filing services from that date.

On 22 October 2026, HMRC published Guidelines for Compliance (GfC22) “Help to prevent payroll errors and PAYE RTI disputed charges”. These guidelines are aimed at employers and payroll providers (as well as those who advise them) and explain how errors in payroll information submitted to HMRC can lead to discrepancies between an employer’s records and the amounts shown as due on HMRC systems. They set out common causes of disputed charges and highlight areas where employers should take particular care when reporting employee and payment information through Real Time Information (RTI). The guidance also covers steps employers can take to prevent errors arising and how errors should be corrected where they have occurred. More broadly, GfC22 is intended to help employers understand the information HMRC expect them to provide through RTI and encourage accurate payroll reporting, reducing the risk of unexpected or disputed PAYE charges appearing on their account.

Residential property purchases can attract considerably more stamp duty land tax (SDLT) than non-residential purchases. Where a purchase includes both, the lower non-residential rates apply to the whole purchase, not just the non-residential part. Inngrays Ltd v HMRC [2026] UKFTT 1478 (TC) shows how even a small non-residential element can make a substantial difference to the tax payable. The First-tier Tribunal (FTT) found that an electrical substation acquired with a building containing five flats was not part of the residential grounds. The electricity company had exclusive possession of the land, which had long been occupied separately and served an independent commercial purpose. As in Sehgal v HMRC [2025] UKFTT 1439 (TC), where an apartment was acquired with a separately leased basement storage unit, the result was mixed-use treatment. This may seem unfair where the buyer is, in substance, acquiring residential property that would ordinarily attract higher SDLT rates, but a small non-residential element brings the whole purchase within the lower rates. Nevertheless, the legislation applies residential rates only where the relevant land is entirely residential. There is no minimum size or value for a non-residential part, provided it genuinely falls outside the residential definition. The Government has consulted on apportioning the purchase price between the two elements but decided not to make that change. Both cases turned on their particular facts and, as FTT decisions, neither is binding precedent.

The Government has reaffirmed its commitment to replacing stamp duty and stamp duty reserve tax (SDRT) with a new Securities Transfer Tax (STT) by the end of 2027 and has now confirmed a number of refinements to the original proposals:

• Agents will no longer face potential STT liability when reporting non-electronic transfers to HMRC;
• STT must be paid before a Unique Transaction Reference Number (UTRN) is issued, meaning transfers cannot be registered until the tax has been settled;
• Loan instruments will only fall within the STT regime if they are also capable of being traded in the same way as equity: and
• Inherent liabilities automatically assumed on the acquisition of securities (commonly arising in pension and insurance business transfers) will be excluded from chargeable consideration.

Legislation for the new tax will be included in Finance Bill 2026-27.

In a written ministerial statement made in April this year, it was announced that measures would be taken to address the unintended SDLT consequences of the Renters’ Rights Act 2025, which effectively replaced assured shorthold tenancies with assured periodic tenancies (this was discussed in more detail in an earlier article). It has now been announced these measures will take the form of an exemption from SDLT (including reporting requirements) for all such leases granted for a rent and will take effect from 1 May 2026 (the date the Renters’ Rights Act took effect). There will be transitional provisions for assured tenancies entered into before this date to ensure no SDLT is paid on rent in respect of periods beyond this date.

One of the lesser publicised measures in the Budget, and unlikely to be of broad impact, is the extension of the rules charging to tax capital sums received for a surrender of rights under a contract, for a loss of rights under that contract. The measure, which has effect from 28 October 2026, effectively seeks to override the decision of the FTT in Dialog Semiconductor Limited v HMRC [2025] UKFTT 1188 (TC), in which a termination fee received following a failed merger was held to be non-taxable under s22 TCGA 1992 because, although received for a loss of rights, there had been no ‘surrender’. Whilst the FTT had implied that HMRC may have been able to successfully argue that the receipt was taxable on different grounds, the change announced at the Budget broadly ensures that going forward the legislation should apply in the way HMRC had originally argued for and should therefore be taken into account when considering the treatment of similar termination fees.