HMRC’s Large Business Directorate works with around 2,000 of the UK’s largest businesses to make sure they pay the correct amount of tax. The National Audit Office (NAO) has announced that it is launching a study to examine if this directorate is delivering value for money. The study will look at whether HMRC have a good understanding of the large business population and the compliance risks involved and are well set up to tackle those risks. It will also look at whether HMRC’s approach is delivering efficient and effective outcomes. The output from this study is scheduled for spring 2026.
NAO launches study on large business tax compliance
Permission to appeal to Supreme Court refused in Beard case on the meaning of ‘dividends of a capital nature’
On 8 October 2025, the Supreme Court refused the taxpayer’s application to appeal the decision of the Court of Appeal in Beard v HMRC ([2025] EWCA Civ 385). This case, which looked at the meaning of ‘dividends of a capital nature’, was an important decision for the taxation of cross-border distributions and was discussed in an earlier edition of Tax Matters Digest. The explanation given for the Supreme Court’s decision was that the “application does not raise a point of law of general public importance”. The result is that the Court of Appeal’s judgment is now the final decision in this case and becomes binding precedent.
New Investment Zone and Freeport maps published
On 14 October 2025, HMRC published maps of the Flintshire and Wrexham Investment Zone tax sites and maps for ‘North Anglesey (Octel)’ and ‘North Anglesey (Rhosgoch)’ Freeport tax sites. Both Investment Zone tax sites and Freeport tax sites offer similar tax benefits.
Employers: time to prepare for increased scrutiny as Fair Work Agency head appointed
Following this week’s appointment of a leader for the new Fair Work Agency (FWA), employers should prepare for sharper scrutiny on compliance. The agency will launch in April 2026 as the UK’s single enforcement body for workers’ rights under the Make Work Pay initiative. Signalling a new era of proactive enforcement, the FWA will have robust powers to inspect workplaces, issue penalties, and bring proceedings on behalf of affected workers. Announcing the new agency lead, the Government highlights that around 900,000 workers are underpaid holiday pay worth around £2.1 billion and that 20 percent of minimum wage workers are underpaid. These are likely to be immediate focuses for the new agency. Employers should therefore review the robustness of their National Minimum Wage and Holiday Pay policies and processes ahead of April 2026.
European Economic Outlook – October 2025
KPMG in the UK has published its European Economic Outlook for October 2025 which looks at the prospects for the European economy for 2025 and 2026, including analysis of growth prospects, trade outlook, consumer spending, inflation, interest rates and fiscal outlook.