Other news in brief

As part of a package of measures aimed at providing support for businesses and individuals in response to the conflict in the Middle East, the Government has announced a temporary reduced rate of VAT (5 percent) for children's meals, tickets and family attractions that will apply from 25 June 2026 to 1 September 2026. Dan Tomlinson, Exchequer Secretary to the Treasury, also published Ministerial Statements on 20 May and 21 May 2026 detailing changes to transport related taxes including:

• The 5p Fuel Duty cut will be extended until 31 December 2026. Planned increases on 1 September 2026 and 1 December 2026 will no longer go ahead, and the main rate of Fuel Duty will remain at 52.95p per litre;
• The duty rate on red diesel will be cut from 10.18p per litre to 6.48p per litre from 15 June until 31 December 2026; 
• Over the next 12 months, when hauliers renew their Heavy Goods Vehicle (HGV) Vehicle Excise Duty (VED), they will pay £1 only; and
• Increases have been made to Approved Mileage Allowance Payments (AMAPs), Mileage Allowance Relief (MAR) and self-employed mileage rates backdated to 6 April 2026 for the 2026/27 tax year. The rates increase to 55p per mile for the first 10,000 miles and remain at 25p per mile for mile 10,001 and over.

On 31 March 2025, regulations were published setting out lists of territories with qualifying income inclusion rules and of qualifying domestic top-up taxes in relation to the UK’s Pillar Two Multinational Top-up Tax (MTT) – our earlier article provides further information. On 24 July 2025, HMRC published a Notice making additions to the lists of territories and this Notice is being updated periodically. The latest update was on 18 May 2026, when the date of effect for Poland was changed from 1 January 2025 to 1 January 2024 in all three lists – a change that will be relevant for many UK groups who were waiting for confirmation on the position for Poland. Kenya, Kuwait, Oman and The Bahamas were also added to list 1.2 (qualifying domestic top-up taxes) and 1.3 (accredited qualifying domestic top-up taxes). HMRC maintain a full list (i.e. the territories included in the original regulations plus all the territories in the updated Notice) at page MTT09970 of the HMRC Multinational Top-up Tax and Domestic Top-up Tax manual.

On 14 May 2026, HMRC published guidance on the taxation of various payments made by developers and others to landowners for the provision of ‘ecosystem services’. HMRC describe this as being “a broad term used to cover contracts for the provision of ecological benefits” such as improvements to water quality, increases in biodiversity and carbon capture. The note refers explicitly to payments for biodiversity net gain, nutrient credits and carbon credits from woodland and peatland under certain statutory and voluntary schemes. Guidance is provided for both the person paying for or buying the ecosystem service and the landowner creating the service. The note covers the implications for income tax, corporation tax, capital gains tax and VAT, as well as stamp duty land tax and inheritance tax. The guidance is as expected and does not constitute a change in policy on HMRC’s behalf but is nevertheless a useful reference document for affected taxpayers. 

On 19 May 2026, the Government published a consultation on the design and delivery of the High Value Council Tax Surcharge (HVCTS), a new charge on residential properties worth £2 million and above in England. The consultation sets out the design of the HVCTS, how ‘owner’ should be defined, the proposed support mechanism for those who cannot pay, a proposed list of property level discounts and exemptions, the billing and administration process, how a homeowner can challenge their banding or liability, the enforcement mechanisms for HVCTS, an assessment of the impact on those with protected characteristics and the approach to valuations. Comments have been requested by 14 July 2026.

On 18 May 2026, HMRC published a consultation seeking views on the potential introduction of mandatory certification for mechanically recycled plastic for Plastic Packaging Tax (PPT) purposes. It explores risks and industry concerns around recycled plastic content claims and seeks views on possible changes to the evidential requirements for claiming a PPT exemption for packaging containing at least 30 percent recycled plastic, the scale and nature of fraudulent claims, the potential impacts on businesses, how a certification requirement could operate and possible timings for implementation. Comments are requested by 10 August 2026.

On 18 May 2026, the draft Registered Pension Schemes (Provision of Information) (Amendment) Regulations 2026 were published by HMRC for consultation. These regulations relate to the inclusion, from 6 April 2027, of certain pension scheme assets within a deceased member’s death estate for inheritance tax purposes. Accordingly, they require pension scheme providers and the deceased member’s personal representatives to share relevant information with each other and with the beneficiaries of the deceased member and HMRC. Comments have been requested on the draft regulations by 11 June 2026.

The UK and the Isle of Man have agreed a new social security agreement. This modernises the provisions of the 1977 Agreement to determine where workers and employers pay their National Insurance contributions, so that they operate in line with the social security agreement the UK has with Jersey and Guernsey, and social security agreements with other countries.

HMRC have added synthesised text of the Multilateral Instrument and the 2012 UK-Bahrain Double Taxation Convention, the1985 UK-Cote D’Ivoire (formerly known as Ivory Coast) Double Taxation Convention and the 2017 UK-Ukraine Protocol to the 1993 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).

KPMG UK’s economics team have published their latest European Economic Outlook for the UK looking at the implications of the Iran conflict for European growth, inflation, interest rates and the risks associated with a more prolonged conflict.