Other news in brief

Earlier this year 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, adding just Guernsey and Spain at that time. An update was then made to this Notice on 15 October 2025, adding 13 further territories so that there are now 15 in total. HMRC maintain a full list (i.e. the territories included in the original regulations plus the 15 territories in the updated Notice) at page MTT09970 of the HMRC Multinational Top-up Tax and Domestic Top-up Tax manual.

HM Treasury has published guidance for local authorities on retail, hospitality and leisure (RHL) hereditaments eligible for the lower RHL multiplier, as part of the Government's review of business rates policy (our earlier article provides further information). Although the rates for the multipliers are not expected to be confirmed until Autumn Budget 2025, the guidance provides examples of qualifying RHL hereditaments that, where their rateable value is less than £499,999, are eligible for the lower business rates multiplier. The legislative definition aims to reflect the scope of the 40 percent RHL relief available in place in 2025/26, but whilst local authorities have discretion over awarding the relief, they will be required to administer the lower multipliers to all qualifying hereditaments in accordance with the legislation.

On 15 October 2025, the OECD published its usual report on recent developments in international tax co-operation for G20 Finance Ministers and Central Bank Governors ahead of their meeting earlier this month. Alongside this report it published “A Decade of the BEPS Initiative” which “takes stock of the progress made in implementing the BEPS measures and the economic impact these changes have had”. Also published was a report outlining a voluntary framework for exchanging information on real estate which, according to the OECD, “builds on the success of automatic information exchange among countries under the Common Reporting Standard, which has recently been expanded to cover crypto-assets and digital platform transactions”. It is not clear from the report which, if any, jurisdictions are likely to implement this framework.

On 14 October 2025, Mark Drakeford MS published a written statement on the draft Welsh Budget for 2026-27 in relation to Welsh taxes. The statement confirms that for 2026-27:

• There will be no changes to Welsh rates of income tax;
• Residential and non-residential rates and thresholds for Land Transaction Tax (LTT) will remain unchanged but further changes will be made to the Multiple Dwelling Relief (MDR) regime “to introduce a new ‘equalisation’ rule to create per-dwelling parity between multiple-dwelling and single-dwelling transactions liable to the higher residential rates” and the existing MDR minimum tax rule rate will increase from 1 to 3 percent. A new refund rule for the higher residential rates of LTT will also be introduced where landlords lease certain dwellings to local authorities; and
• There will be an inflationary increase to the standard rate of Landfill Disposals Tax (LDT), with increased funding for compliance activity. Ongoing proposals to reform landfill tax in England will be monitored but no consequential changes to Welsh LDT are currently envisaged.

Further details were included in the Welsh Tax Policy Report 2025 published the same day.

HMRC have updated their taxpayer specific guidance in respect of the small and medium-sized enterprise (SME) Research and Development (R&D) tax relief regime for periods beginning before 1 April 2024. The guidance specifically relates to the R&D intensive SME regime for periods beginning before 1 April 2024, which allows R&D intensive loss-making claimants to surrender losses for a repayable credit received at a 14.5 percent rather than the 10 percent credit rate available to non-R&D intensive claimants. The updates to the guidance made on 13 October and 15 October 2025 clarify that, for periods beginning before 1 April 2024, claimants will meet the R&D intensity condition if their relevant R&D expenditure is at least 40 percent of the total expenditure for the claimant (and wider group where applicable). Further updates also confirm that the ‘year of grace’ only applies to periods beginning on or after 1 April 2024. The year of grace allows claimants that fail to meet the R&D intensity threshold to continue to qualify for the enhanced credit rate where the R&D intensity threshold was met for the previous accounting period. Prior to these updates the HMRC guidance page outlined an R&D intensity requirement at 30 percent of the total expenditure and the application of the year’s grace for periods beginning before 1 April 2024. However, both conditions are only applicable to periods beginning on or after 1 April 2024 and the updates to the guidance now reflect this. The HMRC additional information form portal guidance, however, provided the correct thresholds for periods beginning before 1 April 2024 and the portal would prevent claims where the correct 40 percent R&D intensity condition was not met. With this in mind it’s unlikely that erroneous SME intensive claims for periods beginning before 1 April 2024 will have been filed, however if you have any concerns in respect of the HMRC guidance updates please reach out to your usual KPMG contact.