19 September 2025
HMRC publish guidance on PAYE rules for labour supply chains including umbrella companies from 6 April 2026
On 17 September 2025, HMRC published a new guidance page titled PAYE rules for labour supply chains that include umbrella companies from 6 April 2026. The guidance relates to new rules included in draft legislation published by HMRC on L-Day. Under these rules, from 6 April 2026, recruitment agencies (or, in their absence, end clients) would be jointly and severally liable for PAYE on payments to workers supplied through umbrella companies. HMRC state that there will be updates to reflect any changes made before the draft legislation becomes law. HMRC have also updated their Employment Status Manual (see ESM2400+).
HMRC publish technical note on reserved investor fund tax rules
On 17 September 2025, HMRC published a technical note on the tax rules for the ‘reserved investor fund’ (RIF), a new type of investment fund open to professional and institutional investors. The technical note aims to assist taxpayers and their advisers in understanding and applying the Co-ownership Contractual Schemes (Tax) Regulations 2025, which came into force on 19 March 2025 and set out the tax rules relating to RIFs. HMRC state that they will update their Investment Funds Manual to provide more detailed guidance, including further worked examples.
Isle of Man: Pillar Two registration now available
Isle of Man Pillar Two registration is now available via the Island’s Income Tax Division’s online services. Registration will be required in respect of all Isle of Man entities that are part of an in-scope Pillar Two multinational group. All in-scope multinational groups will be required to appoint a domestic filing entity, which will be the member of the group responsible for registration of all members of the group with the Assessor and submission of domestic top-up tax and multinational top-up tax returns. The deadline for registration is 12 months from the start of the first fiscal year commencing on or after 1 January 2025. Read more on tax@hand.
Lyko Operations AB: VAT treatment of loyalty schemes
Swedish company Lyko Operations AB sold hair care and beauty products in physical shops and online. Lyko was developing a customer loyalty programme whereby customers could receive points for purchases, which they could redeem for goods from a ‘points shop’, but only in connection with a subsequent purchase. Lyko applied for a ruling from the Swedish Revenue Law Commission to clarify how the programme should be treated for VAT purposes. This subsequently resulted in a referral to the Court of Justice of the European Union asking whether the points awarded in Lyko’s programme were vouchers (under Article 30a of the EU Principal VAT Directive (PVD)), and, if so, how the taxable amount would be determined upon redemption.
Advocate General (AG) Kokott has opined that the issue of the points did not constitute a voucher. Under the PVD, the definition of voucher requires two conditions: first, the goods/services or the potential supplier must be identifiable from the voucher or related documentation; and second, there must be an obligation to accept the voucher as consideration for a supply. While Lyko’s programme would satisfy the first condition, it would not meet the second. The points could only be redeemed in conjunction with a subsequent purchase, and therefore functioned as an effective discount. There was no obligation on Lyko to supply goods independent of a subsequent purchase. The AG also dismissed arguments that the points represented gifts or would be provided free of charge, on the basis that the value of the points is included in the price of the initial purchase. In light of the AG’s finding, it was not necessary to answer the second question, regarding the calculation of the taxable amount. It remains to be seen whether the CJEU will follow the AG’s opinion. (Contact: Andrew Roberts)
EMEA Dbriefs webcasts
As a reminder, the next EMEA Dbriefs tax webcast is on Wednesday 24 September 2025 at 12.00 BST/13.00 CEST. In Tax Transformation Trends 2025, hosted by James Paul, our panel will discuss Deloitte's latest Tax Transformation Trends report, based on a survey of over 1,000 senior tax and finance leaders. We will consider topics including the increasing demand for granular data, cost pressures, strategic adoption of AI, and the rise of outsourcing.
On Thursday 25 September 2025, Steph Hurst will be hosting Update on latest Pillar Two developments. In the webcast our panel will discuss the market response to recent significant Pillar Two-related announcements from the G7, EMEA and the US, as well as some of the data aggregation, software selection and technical implementation issues causing organisations concern.