Business Tax Briefing

2026-27 Scottish Budget to take place on 13 January 2026

On 6 October 2025, Scottish Cabinet Secretary for Finance and Local Government (Shona Robison MSP) confirmed that the Scottish Government will publish the 2026-27 Scottish Budget and associated documents on Tuesday 13 January 2026. Robison confirmed the date in a letter published by the Finance and Public Administration Committee of the Scottish Parliament, following a request from the Committee to bring the previously proposed date of Thursday 15 January 2026 forward.

As a reminder, an outline draft Welsh Budget is due to be published on Tuesday 14 October 2025, with a more detailed draft Budget published on 3 November 2025. The final Welsh Budget is due to be published on 20 January 2026 and debated on 27 January 2026.

EU public country-by-country reporting – first reporting for Croatia

The EU’s directive on public country-by-country reporting (CbC) requires multinationals with worldwide annual revenues of more than EUR 750 million to disclose publicly, on a country-by-country basis, corporate income tax information relating to their operations in each of the 27 member states, as well as information for third countries on the EU list of non-cooperative jurisdictions. Data relating to operations in other non-EU countries would be combined in one aggregated ‘rest of world’ line. Both large EU-parented groups, and large non-EU parented groups with large or medium-sized EU subsidiaries or branches, will have reporting obligations, and the reporting will generally take place within 12 months from the balance sheet date.

The directive required the member states to implement their public CbC rules with effect for periods commencing on or after 22 June 2024 at the latest, however a small number of member states implemented their rules with effect for earlier periods, including Croatia (for periods from 1 January 2024). To be within scope of the Croatian rules, a non-EU headed group will need to have at least a medium-sized subsidiary or branch in Croatia, and in-scope groups with a calendar year end will have until 31 December 2025 to publish their reports for 2024. As reported in Business Tax Briefing last year, Romania was the earliest adopter, applying similar rules for periods from 1 January 2023.

Hippodrome Casino Ltd: Input tax apportionment methodology

The Hippodrome in Leicester Square has casinos, bars and restaurants, and a theatre. In 2022, the First-tier Tribunal (FTT) agreed with Hippodrome Casino Ltd (HCL) that a floorspace-based standard method override (which improved HCL’s input tax recovery) was a better reflection of the use of HCL’s costs than the standard method, based on turnover. This was essentially on the basis that there was little crossover between the casinos (VAT exempt) on one hand, and the bars, restaurants, and theatre (taxable) on the other. The Upper Tribunal (UT) overturned this decision. The Court of Appeal (CA) has now upheld the UT’s decision unanimously.

The CA found that the UT was correct to find material error in the FTT’s decision, and to set it aside. The CA considered that the FTT had failed to address HMRC’s core argument; that the areas designated as relating to taxable activity in HCL’s override calculation had a dual use, that is, the bar, restaurant, and theatre areas also economically supported and promoted gaming. The CA went on to find that, having set aside the FTT’s decision, the UT was also correct to remake the decision in HMRC’s favour. The standard method can only be overridden by another method that gives rise to a more precise result. The UT correctly identified this as the issue, and concluded that the floorspace method was not a more precise measure than the standard method. The CA also rejected HCL’s argument that UT should have “left [the door] open for further argument” if it was not persuaded by the floorspace method. The standard method applied by default, and HCL had failed to displace it. Finally, the CA agreed with HMRC that the input tax restriction on business entertainment expenditure must be applied to the pot of residual input tax, before the standard method is applied. The CA dismissed HCL’s appeal, thereby confirming the application of the standard method apportionment. (Contact: Judith Lesar)

EMEA Dbriefs webcasts

The next EMEA Dbriefs tax webcast is on Thursday 16 October 2025 at 13.00 BST/14.00 CEST. In European snapshot: Major tax changes in key European markets for your mobile workers – are you ready?, hosted by James Macpherson, our panel will discuss some significant upcoming changes to tax filing and reporting in a number of key European countries, as a consequence of major changes announced to expatriate rules by local tax authorities. We will look at the key points to be aware of, with a focus on Belgium, France, the Netherlands and the UK.

On Monday 20 October 2025 at 12.00 BST/13.00 CEST Amanda Tickel will be hosting Global trade update. In the webcast our panel will share insights into navigating the complexities of the evolving global trade environment. We will discuss the latest developments in global trade and their impact, how companies are adapting to higher US tariffs, and the implications for tax and transfer pricing strategies.