21 November 2025
Autumn Budget next week
A reminder that the Chancellor of the Exchequer, Rachel Reeves MP, will present her Budget next week on Wednesday 26 November 2025. The Chancellor will face the challenge of addressing the fiscal gap while simultaneously aiming to boost growth and encourage investment. For insights on the Budget announcements, visit our Autumn Budget 2025 page.
There will be an EMEA Dbriefs webcast on Thursday 27 November 2025 at 12.00 GMT/13.00 CET, during which our panel of experts will provide an update on the Budget’s tax announcements.
Remote working permanent establishments and other updates to the OECD Model Tax Convention
On 19 November 2025, the OECD published approved updates to the OECD Model Tax Convention on Income and on Capital (the OECD Model Treaty). The updates include changes to the OECD Model Treaty’s commentary on the definition of a ‘fixed place of business’ permanent establishment in situations of cross-border remote working, in particular home working. The commentary has also been updated to include new alternative additional model treaty rules, previously consulted upon in 2024, which countries could use in relation to taxation rights over the exploration and exploitation of extractible natural resources. The updates will be incorporated into a revised version of the OECD Model Treaty that will be published “in the next few months.” For further details, and other OECD Model Treaty updates, please see our alert.
Court of Appeal dismisses ‘wholly and exclusively’ appeal regarding unapproved pension scheme
The Court of Appeal (CoA) has dismissed the appeal of two taxpayers in AD Bly Groundworks and Civil Engineering Limited and Another v HMRC, on whether large accruals arising following implementation of an ‘unfunded unapproved retirement benefit scheme’ (UURBS) were allowable for corporation tax purposes. Under the UURBS, the appellants promised to provide directors and key employees with pension amounts in the future, calculated by reference to the estimated profits for the relevant year – ranging between 80% and 100% of the companies’ estimated profits before tax. Between 2012 and 2014, the companies made accounting provisions for the liability, and claimed deductions to reduce their corporation tax liability. HMRC, however, considered the expenses were not incurred ‘wholly and exclusively’ for the purposes of the trade, and thus were not allowable under section 54 Corporation Tax Act 2009.
The First-tier Tribunal (FTT) found that the primary purpose for making the accruals was to reduce the liability to pay corporation tax without incurring any actual expenditure, and after analysing the relevant case law, it agreed that the expenses were not incurred ‘wholly and exclusively’ for the purposes of the trade. The CoA, like the Upper Tribunal before it, agreed that this was a case of a payment being made with the object of artificially reducing the companies’ taxable profits, and that the FTT was entitled to conclude that the expense was not incurred wholly and exclusively for trading purposes. The CoA described the FTT’s conclusion on the facts, that “the UURBS was adopted as a tax saving scheme and the provision of pensions was “at best” an incidental aim” as fatal to the taxpayers’ case. Whilst not necessary to dismiss the appeal, the CoA also considered and dismissed a backup argument from HMRC that the expenditure would have otherwise been disallowed as being within the scope of section 1290 CTA 2009 (‘Employee benefit contributions’).
Belgium announces extension to filing deadline for first QDMTT returns
On 17 November 2025, the Belgian tax authorities announced an extension of the deadline to submit the first qualified domestic top-up tax (QDMTT) returns from 30 November 2025 to 30 June 2026. The extended deadline is available to multinational groups with accounting periods starting on or after 31 December 2023 and ending on or before 30 June 2025. This extension is therefore not available for multinational groups with a consolidated accounting year ending after 30 June 2025. For these businesses, the standard rule continues to apply, i.e., the QDMTT return must be submitted by the last day of the 11th month following the end of the fiscal period. For further information see Deloitte Belgium’s alert on tax@hand.
OECD publishes latest tax administration report
On 17 November 2025, the OECD published the latest report in its tax administration series, Tax Administration 2025. The report compares aspects of tax systems and their administration across 58 countries, based on data collected in the 2023 fiscal year. In addition to the usual focus on performance-related data from the latest available fiscal year, this year's edition also gives a 10-year perspective on the evolution of tax administration and looks at how the rise of AI is shaping the future of tax administration. According to the report, the percentage of tax administrations using AI has increased significantly from 9% in 2016 to 69% in 2023, with a further 24% reporting that they are implementing it for future use. The report includes examples of how tax administrations are deploying AI, including to support analytical work, provide faster and more efficient services to taxpayers, and improve case work selection. A summary of data for the UK is available here.
OECD publishes report on effective carbon rates
The OECD has published its annual report on Effective Carbon Rates 2025: Recent Trends in Taxes on Energy Use and Carbon Pricing. The report covers 79 countries, collectively accounting for approximately 82% of global greenhouse gas (GHG) emissions. The report examines governments’ use of effective carbon rate (ECR) instruments including carbon taxes, emissions trading systems (ETSs), and fuel excise taxes. The OECD states that “As carbon pricing continues to expand across countries and sectors as part of broader carbon mitigation efforts, design choices are increasingly diverse and flexible to reflect a variety of policy objectives including reducing emissions, raising public revenue, and strengthening energy affordability, energy security, and competitiveness.” According to the report, carbon taxes and ETSs are in place in over 50 countries. 44% of GHG emissions from the 79 countries covered were subject to an ECR instrument (i.e., a carbon tax, a carbon price from an ETS, a fuel excise tax, or a combination of these) in 2023, compared to 33% of emissions in 2018. The report states that “Fuel excise taxes remain the most used ECR instrument, covering 24% of emissions, versus 5% for carbon taxes and 22% for ETSs.”
EMEA Dbriefs webcasts
We will be hosting an EMEA Dbriefs tax webcast on Tuesday 9 December 2025 at 13.00 GMT/14.00 CET. In Off payroll workforce tax and legal risk, our panel will discuss upcoming reforms to tax legislation for labour supply chains involving intermediaries which will make businesses joint and severally liable to account to HMRC for employment taxes liabilities of third-party employees. We will highlight practical steps organisations should take, explore the draft legislation, discuss connected tax and legal matters, and set out a potential roadmap for businesses.