10 April 2026
Updated Company Tax Return and new creative industries supplementary page published
HMRC have published updated versions of the Company Tax Return Form (CT600) and its accompanying guide for the start of the new financial year. A new supplementary page relating to creative industry tax reliefs (CT600P) has been published, as well as updated versions of the CT600L (research and development), CT600A (close company loans and arrangements to confer benefits on participators), and CT600E (charity and Community Amateur Sports Clubs) supplementary pages.
HMRC publish guidance on calculating hybrid rate of writing down allowance
On 1 April 2026, HMRC published a guidance page titled, Calculate your hybrid rate of writing down allowance. As announced at Budget 2025, the main rate of writing down allowance (WDA) for plant or machinery reduced from 18% to 14% with effect from 1 April 2026 for corporation tax and 6 April 2026 for income tax. The page includes an eight-step guide on how to calculate a hybrid writing down allowance rate for an accounting period straddling 1/ 6 April 2026, together with a calculator tool. HMRC have also made associated updates to their Capital Allowances Manual, including the addition of a new page on calculating a hybrid rate (see CA23222).
HMRC manuals: Construction Industry Scheme fraud
HMRC have added a section to their Construction Industry Scheme Reform Manual (see CISR85000) on new HMRC powers to tackle fraud within the Construction Industry Scheme (CIS). The powers, which were enacted in Finance Act 2026, came into effect on 6 April 2026. The new section includes a list of indicators which, in HMRC’s view, suggest that a business ‘knew or should have known’ about the relevant deliberate compliance failure by another person in the supply chain. It also covers determinations and penalties under the new rules, as well as HMRC’s power to immediately cancel a person’s gross payment status.
Regulations: underpayment and overpayment interest rates for UK Pillar Two taxes
On 24 March 2026, HM Treasury made regulations setting the applicable rates of interest for unpaid and overpaid amounts of multinational top-tax (MTT) and domestic top-up tax (DTT). The interest rate applicable for late payment interest will be based on the Bank of England Bank Rate plus four percentage points. The interest rate applicable for repayment interest will be the Bank Rate less one percentage point, or 0.5 percent if greater. These rates are in line with the late payment and repayment interest rates used by HMRC for most other taxes.
Upper Tribunal allows taxpayer's capital allowances balancing charge appeal
The Upper Tribunal (UT) has allowed the taxpayer’s appeal in the capital allowances case CATS North Sea Limited v HMRC, concerning balancing charges arising following an intra-group transfer of an interest in a hydrocarbon pipeline and the subsequent sale of shares in the transferee, CATS North Sea Limited (CNSL). The core dispute revolved around statutory interpretation of provisions deeming ‘oil-related activities’ as a separate trade (section 279 CTA 2010) and more general rules for capital allowances on intra-group transfers (Part 22 CTA 2010).
The UT held that the First-tier Tribunal (FTT) erred in considering that section 279 did not apply to prevent the Part 22 provisions from applying to the relevant transactions. The UT re-made the decision in line with CNSL’s ‘Scenario D’ analysis; that the transferor be deemed to be carrying out two part trades. Part 22 did not apply to the ‘part trade’ that changed from being inside the oil and gas regime ring fence (IRF) for the transferor to being outside of the ring fence (ORF) for CNSL. (Conversely, Part 22 did apply to the part-trade that remained IRF for both parties). On the share sale, CNSL’s IRF qualifying activity ceased, resulting in an IRF balancing charge of approximately £23 million, rather than the £167 million argued by HMRC.
Colchester Institute Corporation: Further education business activities
In 2024, the Upper Tribunal (UT) held that the provision of further education by Colchester Institute Corporation (the College), funded by government agencies, was the supply of services for consideration (and not a non-business activity, as had previously been considered to be the case). This decision followed a 2020 UT decision between the same parties on related issues impacting the further education sector. HMRC challenged both decisions, and the Court of Appeal (CA) has now found in favour of the College.
HMRC appealed the UT decisions on two grounds. First, that the UT erred in its analysis of the CJEU judgment Le Rayon d’Or Sarl, in which it was held that a lump sum paid by a state sickness insurance fund to care home providers constituted consideration for the supply of healthcare provided by those homes to residents, and was within the scope of VAT. The CA agreed with HMRC that Rayon d’Or did not itself determine the appeal in the College’s favour, as the UT had concluded. The CA did, however, reject HMRC’s argument that the case provided no support to the College’s case. HMRC’s second ground was that the UT had erred in interpreting and applying the requirement for a ‘direct link’ between the supplies made and the consideration received. (The UT had gone on to consider the merits of the College’s case in the event that Rayon d’Or was not determinative of the appeal.) The CA reviewed the funding arrangements and other factors and concluded that the government agencies were providing funds in return for the provision of services by the College to students in the form of approved courses, and not funding the College generally on condition it provide such courses. Accordingly, the CA rejected HMRC’s second ground, and dismissed the appeal.
EMEA Dbriefs webcasts
The next EMEA Dbriefs webcast will take place on Tuesday 14 April 2026 at 12.00 BST/13.00 CEST. In Platforms and GenAI: How can tax and legal teams provide strategic value?, hosted by David Langford, our panel will discuss the tax and legal challenges arising from digital platforms and generative AI applications. We will cover complexity around IP ownership and development, transfer pricing implications, tax incentives, and give cross-industry insight into how digital platforms and GenAI can be a catalyst to a spectrum of business transformation.
On Thursday 16 April 2026 at 12.00 BST/13.00 CEST, Bhavik Patel will be hosting Post Merger Integration (“PMI”) – key considerations. Our panel will address the main tax, legal and accounting considerations when integrating a business post-acquisition. We will discuss how to ensure IP, intangibles, transfer pricing, internal functions and integration costs are all proactively managed from the outset to efficiently integrate groups and realise efficiency gains as quickly as possible.