25 September 2026
HMRC publish corporation tax statistics
HMRC have released the latest edition of their annual national statistics publication, Corporation Tax Statistics. The publication provides details and breakdowns of UK corporate tax amounts (which for these purposes also include bank surcharge, bank levy, residential property developer tax, energy profits levy, and electricity generator levy amounts) covering receipts received up to the 2025-26 tax year, and tax liabilities up to the 2024-25 tax year. Total receipts from all corporate taxes increased by 4% in 2025-26 to £100.4 billion, which HMRC attribute largely to a strong post-pandemic recovery, the increase in the main rate of corporation tax to 25% in April 2023, and the introduction of new corporate taxes and levies. A breakdown of corporation tax receipts by sector shows that the financial and insurance sector remained the single largest contributing sector.
Environmental Services Limited: waste management activities did not amount to R&D
The First-tier Tribunal (FTT) has dismissed the taxpayer’s appeal in the research and development (R&D) tax relief case Environmental Services Limited v HMRC. Environmental Services Limited (‘ESL’), a waste collection and transportation business, appealed against HMRC's closure notices for the periods ending 31 July 2020 and 31 July 2021, disallowing its claims for R&D tax relief in respect of two interlinked projects. ESL submitted that the projects were not routine waste-management activities and instead involved experimentation to solve technological problems concerning the handling and transportation of complex waste streams.
The FTT first considered whether ESL had demonstrated that it had undertaken R&D within the meaning of the relevant legislation and the BEIS Guidelines. The FTT held that ESL undertook practical problem-solving in response to operational and commercial challenges rather than projects directed towards achieving an advance in science or technology. The resulting improvements were to ESL’s operations rather than to the underlying field of waste management technology. Therefore, ESL did not establish that the activities amounted to R&D. Even if the projects had constituted qualifying R&D activities, the FTT also concluded that ESL had not established the amount of qualifying expenditure for which relief could be claimed.
Pillar Two: subject to tax rule multilateral instrument entry into force
The OECD has announced that the Multilateral Convention to Facilitate the Implementation of the Pillar Two Subject to Tax Rule (STTR MLI) will enter into force on 1 January 2027. The subject to tax rule (STTR) is a model treaty provision, agreed by the G20/OECD Inclusive Framework on BEPS as part of its work on Pillar Two, that is designed to allow developing countries to amend their tax treaties such that they can impose taxation at source on many cross-border payments. The payments affected are those between connected companies where the recipient is subject to a statutory or regime corporate tax rate below 9%.
The STTR MLI is intended to facilitate the implementation of the STTR within relevant existing bilateral tax treaties, however changes will only be made once both treaty partners to a specific bilateral tax treaty have taken the required steps to ratify the convention. To date, the only ‘match’ (i.e. where both treaty partners have listed the relevant treaty in their notification of tax treaties that they wish to be covered) is between Romania and San Marino, however Romania, as at 15 September 2026, had not yet deposited its instrument of ratification for the STTR MLI.
Vaping products duty comes into effect
Vaping products duty (VPD) will come into effect on 1 October 2026, at the rate of £2.20 per 10 ml of vaping liquid. At the same time, a vaping duty stamps (VDS) scheme will be introduced to mandate stamping of vaping products manufactured in, or imported into, the UK, extending to all vaping products made available for sale in the UK from 1 April 2027. Manufacturers, importers, and warehousekeepers require HMRC approval for VPD and the VDS, and HMRC have stated that those without the requisite approvals from HMRC “cannot produce vaping products in the UK and may be unable to trade”. HMRC have published a collection page with their guidance on VPD and VDS, and also their internal manual, setting out the relevant legislation and HMRC policy on the law and its application. (Contact: Donna Hemphill)
EMEA Dbriefs webcasts
The next EMEA Dbriefs webcast will take place on Tuesday 6 October 2026 at 12.00 BST/13.00 CEST. In Leading the future of tax with AI, hosted by Frankie Jell, we will consider what the tax function will look like in 2030, and what leaders should be doing today to prepare. We will discuss the rise of agentic compliance; the future of tax administrations, including digital audits, real-time reporting, e-invoicing and machine-to-machine interactions between taxpayers and authorities; how leading organisations are reimagining the tax operating model; the future of the tax workforce; the use of data, AI and emerging technologies to provide strategic business insights; and practical actions tax leaders can take now.