1 May 2026
OECD publishes Global Minimum Tax Implementation Toolkit
On 30 April 2026, the OECD Forum on Tax Administration published a Global Minimum Tax Implementation Toolkit in relation to the G20/OECD Inclusive Framework’s Pillar Two global minimum tax rules. The Toolkit is designed to support countries in implementing and applying the global minimum tax rules in a consistent and co-ordinated way. Further details are in our alert.
National Insurance Contributions (Employer Pensions Contributions) Act 2026 – Royal Assent
On 29 April 2026, Parliament prorogued ahead of the end of the 2024-26 parliamentary session. The State Opening and King's Speech, in which the Government will set out its planned legislative programme for the next parliamentary session, will take place on 13 May 2026.
As part of the ceremony marking the prorogation of parliament, Royal Assent was granted to a number of bills, including the National Insurance Contributions (Employer Pensions Contributions) Bill, which creates a power for the Treasury to apply NICs to salary-sacrificed pension contributions that exceed £2,000 per annum from April 2029. It is expected that the text of the National Insurance Contributions (Employer Pensions Contributions) Act 2026 will be published shortly on legislation.gov.uk.
HMRC publish MLI synthesised text of UK-Spain tax treaty
HMRC have published a new ‘synthesised text’ showing how the operation of the 2013 UK-Spain Double Taxation Convention is modified by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the ‘MLI’).
According to the synthesised text, unless it is stated otherwise elsewhere in the document, the provisions of the MLI took effect with respect to the treaty: in the UK and Spain, for taxes withheld at source, from 1 January 2023; in the UK, from 1 April 2023 for corporation tax and from 6 April 2023 for income tax and capital gains tax; and in Spain, for other taxes, for taxable periods beginning on or after 1 January 2023.
Corporation tax treatment of compensation for mis-sold interest rate hedging products
The First-tier Tribunal (FTT) has dismissed the taxpayer’s appeal in the corporation tax case Chester Lettings Limited. The case concerns the tax treatment of compensation (including an interest element) received for mis-sold interest rate hedging products (IRHPs). In this case, the hedging product was embedded within the loans. The FTT upheld HMRC's position that the compensation was a ‘redress payment’, taxable as a non-trading loan relationship (NTLR) credit. The taxpayer’s argument that the payment was for a 'lost opportunity', which is a ‘capital’ sum was rejected.
OECD publishes Taxing Wages 2026
The OECD has published the latest in its annual series of employment tax reports Taxing Wages. The latest report shows that the average ‘tax wedge’ – i.e. the average total taxes on labour costs paid by employees and employers as a percentage of the total labour cost to the employer – across the OECD for a single worker earning an average wage was 35.1% in 2025 (up by 0.15 percentage points from 2024). The tax wedge ranged from 52.5% in Belgium to 0% in Colombia. The equivalent figure for the United Kingdom for 2025 was 32.4%: an increase of 2.45 percentage points from 2024, mainly due to fiscal drag and the increase in the national insurance contribution rate accompanied by the lowering of the minimum earnings threshold. The UK’s employment tax burden in 2025 ranked 13th lowest out of the 38 OECD countries.
RCB 3 (2026): VAT treatment of public funds received by further education institutions
HMRC have published Revenue and Customs Brief 3 (2026) (RCB) on the VAT treatment of certain public funds received by further education institutions. The RCB sets out HMRC’s response to the Court of Appeal (CA) judgment in Colchester Institute Corporation. The RCB explains that, historically, HMRC took the view that amounts paid by government agencies to further education institutions to fund free education provided to eligible students were a grant, and outside the scope of VAT. However, in Colchester, the CA confirmed the Upper Tribunal (UT) decision that the funding was third-party consideration for the supply of education services to students. The RCB states that HMRC will not be appealing the CA judgment, which they will now consider further, in consultation with stakeholders. Any change in policy will be announced by way of a RCB and updated guidance.
Following the UT decision, HMRC gave further education institutions the option either to treat funding as third-party consideration or to continue treating education as a non-business activity. According to the RCB, for institutions that have continued to treat education as a non-business activity, any change to the VAT treatment will only apply from a future, yet-to-be-announced, date. Such institutions may continue to apply the relevant VAT zero- and reduced-rate reliefs, until the date of any change, and HMRC will not revisit prior periods. Institutions that adopted the third-party consideration approach should continue to do so. Such institutions should not have continued to apply the reliefs and also may be within the scope of the private school fees legislation. (Contact: Jacqui Nicholls)
EMEA Dbriefs webcasts
The next EMEA Dbriefs webcast will take place on Wednesday 20 May 2026 at 12.00 BST/13.00 CEST. In Future-proofing your Global Workforce: The role of location strategy in talent attraction, development, and retention, hosted by Teji Susheela Vishwanath, we will discuss how the transformation of the work landscape, driven by economic and geopolitical uncertainty, talent shortages, AI, and digitisation, is compelling business leaders to strategically rethink their location footprint. We will explore why location strategy matters in a digitised world, and how strategic location decisions can enhance talent attraction, development, and retention.