Just as Tax Matters Digest went to press, the Supreme Court released its decision in ScottishPower (SCPL) Limited and others v HMRC [2026] UKSC 35 (a press release summarising the decision was also published alongside it). This is an important case looking at the deductibility of payments made by ScottishPower to the regulator Ofgem under various settlement packages. These redress payments were separate to, and distinct from, nominal penalties paid by the taxpayer and the Court of Appeal held that they were fully deductible (see our earlier article). The case attracted significant attention in terms of its clarification of the basic principles governing the deductibility of penalties and related amounts. The Supreme Court has now allowed HMRC’s appeal. This decision has potentially broad implications and we will include our commentary in the next edition of Tax Matters Digest when we have fully reviewed the Supreme Court’s analysis.
The Supreme Court releases decision in the ScottishPower case on the deductibility of redress payments
ICAEW to create the ‘Future of Tax Commission' to tackle tax complexity
The ICAEW has announced that it is forming an independent body to review the UK tax system and “provide a roadmap for reforms that will reduce complexity and ensure the regime can keep pace with wider societal changes”. The Future of Tax Commission will be chaired by former Conservative MP and Treasury Minister, Mark Hoban, and is expected to start work from January 2027. It aims to provide a roadmap of recommendations ahead of the next General Election, expected in 2029.
New employment rights consultation launched
The Department for Business, Innovation, Science and Trade has launched a new consultation titled “Make Work Pay: employment status reform and protections for the self-employed”. It invites views on proposals to reform employment status, improve compliance with employment rights, and strengthen protections for the self-employed. It does not propose any reforms to the separate employment status frameworks for tax and social security. Specific proposals include placing less emphasis on personal service when determining worker status, improving compliance with the employment status framework (including through a presumption of worker status and enforcement measures), and strengthening protections for the self-employed (including through written statements, blacklisting protections, and health and safety protections). The consultation also asks how these proposals could operate in practice. This consultation will close on 8 January 2027.