Tax Matters Digest

Congratulations! If you’re reading this then you have survived the tax profession’s equivalent of Takeshi’s Castle: January. Whether it was the personal tax return deadline, year-end reporting or the inevitable ‘urgent’ transaction, you made it to the finish line (probably not intact, but, hey, as an outgoing Prime Minister once said - them’s the breaks). And you've earned a break: so put your feet up, grab a coffee and peruse our latest edition of Tax Matters Digest.

At Tax Matters Digest we also find ourselves coming up for air after a busy few months of tax news. Our spotlight article in this edition takes stock of recent tax changes impacting Professional Services firms and considers how best to respond. Although written through the Professional Services lens, much of the content is equally applicable to other sectors.

Our next article covers HMRC’s successful Upper Tribunal appeal in the BCG Partnership case, exploring how the tribunal looked beyond the labels given to a transaction and instead considered the economic reality to determine the correct tax treatment.

Continuing the partnership theme, we then provide a link to the recording of a briefing with tax barrister Oliver Marre and representatives from KPMG's Tax and Legal practice who provided their immediate reaction to the BlueCrest Supreme Court hearing, which took place on 28 and 29 January 2026. This case looks at the application of the Salaried Members Rules to certain members of BlueCrest Capital Management LLP.

As the Finance Bill continues its journey through Parliament, we examine the latest set of government amendments which include, amongst other things, deadlines for making certain Pillar Two elections, and targeted changes to the provisions relating to Umbrella Companies, the Loan Charge, CBAM and tax adviser registration.

We then look at recently published HMRC guidance on changes to reporting net-settled employee share awards. If you haven’t considered your employment-related security return since the deadline last July, then this article helpfully reminds you what net settlement is, why it matters, then talks you through the changes and what you have to do to ensure you get your next return right.

Our following article looks at more new HMRC guidance, this time clarifying the correct application of the Employment Income article of a tax treaty to deferred remuneration.

We then take you to Tim Sarson’s latest CityAM article, which looks beyond the detail of the recently released Pillar Two Side-by-Side package, and reflects upon what the future might hold for the Pillar Two project and the International Rules Based Order more broadly.

Our Other News in Brief this week reports on the OECD’s update to the Manual on Effective Mutual Agreement Procedures; summarises the key messages from a recent OECD meeting on the tax challenges and opportunities associated with the global mobility of individuals; covers the Government’s recent announcement of additional targeted Business Rates relief for pubs and live music venues; and HMRC updates to the Creative Industries Expenditure Credit Manual. We close out this edition with our usual Indirect Tax Weekly Talking Points which has a round-up of all things VAT, and Week in Tax covering key tax developments from around the world.

It's been a long month for me too, and I am most certainly not intact after it, so it’s unsurprising (but no less concerning) that I find myself quoting the former PM for a second time as I bid you - and January - Hasta la Vista, Baby.

Stefanie Redmond
Senior Manager, Tax Policy
KPMG in the UK