6 November 2026
Finance Bill published
The text of Finance Bill 2026-27 was published on 4 November 2026. The Bill’s dedicated pages on Parliament’s website are here. The Bill had its First Reading in the House of Commons on 3 November 2026 following the conclusion of MPs’ debate on the Budget and their approval of the Budget’s Ways and Means Resolutions.
HMRC publish guidance on treatment of failures to deduct UK interest withholding tax
On 2 November 2026, HMRC published new (INTM413232, INTM413234, and INTM413236) and updated (INTM413205) guidance on the treatment of failures to deduct UK withholding tax (WHT) on payments of interest. HMRC have introduced a formal treaty-relief claim process for payers (typically borrowers) that failed to deduct the required tax. Under the new process, the payer can claim to (i) discharge its liability to account to HMRC for WHT that remains unpaid, without first paying that tax, or (ii) obtain repayment of WHT already paid to HMRC, in each case to the extent treaty relief is available. HMRC have also published a new page setting out how to make a claim and including the relevant form.
HMRC’s guidance states that the previous concession under which HMRC could, where the relevant conditions were met, collect only late-payment interest rather than assessing the underlying WHT, has been withdrawn for disclosures received on or after 2 November 2026, including disclosures of historical failures. However, for existing paused disclosures, it is possible to use the new claim route (subject to eligibility and time limits) although in such cases late-payment interest is currently expected to run from the original tax-payment deadline until the earlier of (i) submission of a valid claim, or (ii) payment of the tax (i.e. not necessarily to the date the original disclosure was submitted). Discussions with HMRC on the interactions between the new claims route and paused disclosures are ongoing as there remain points of uncertainty.
International Controlled Transactions Schedule (ICTS) regulations published
On 4 November 2026, HMRC laid the International Controlled Transaction Reporting Regulations 2026 (SI 2026/1156) before the House of Commons. Following on from a consultation held over the summer, the new regulations will bring into force the new ICTS transfer pricing documentation requirement. Under the ICTS, in-scope entities will be required to provide HMRC with cross-border related-party transactional data in a structured format annually. As expected, the rules are being introduced with effect for accounting periods starting on or after 1 January 2027. HMRC have published draft guidance on the regulations in their International Manual here and here.
Finalised rules on the information that will need to be reported in an ICTS submission will be confirmed in a separate detailed notice. HMRC aim to publish this statutory notice on 26 November 2026. (Contact: Jonathan Beeston or Rebecca Mathews)
Upper Tribunal sets aside First-tier Tribunal decision on capital allowances treatment of quay wall
The Upper Tribunal (UT) has set aside the First-tier Tribunal’s (FTT’s) decision in the capital allowances case HMRC v The Mersey Docks and Harbour Company Limited. The case concerns whether capital expenditure of over £57 million incurred by the taxpayer on the construction of a ‘quay wall’, as part of a new deep-water container terminal at the Port of Liverpool, qualified for capital allowances. In its December 2024 decision, the FTT held that expenditure on the quay wall was expenditure on the provision of plant or machinery. The FTT found that although the expenditure was prima facie excluded from the scope of capital allowances by List B (section 22 Capital Allowances Act 2001), as it was on installing machinery (ship-to-shore cranes) it was saved by Item 1 List C (section 23 Capital Allowances Act 2001).
The UT has identified several material errors of law in the FTT’s decision. In the UT’s view, the FTT wrongly analysed the quay wall and cranes as a composite asset when deciding whether the quay wall itself was plant. As a result, it also erred by not making any separate assessment of whether the quay wall was functioning as plant or premises. Furthermore, the FTT failed to adequately explain why mooring vessels and supporting the cranes were more important factors than the quay wall’s role in retaining reclaimed land. The UT further considered that the FTT applied the wrong test in determining whether expenditure on the quay wall was expenditure on the provision of machinery. Applying the Supreme Court’s decision in Orsted, the UT emphasised that whilst expenditure may be necessary for the provision of plant, there must still be a sufficiently close connection between the expenditure and the provision of the plant. The UT concluded that it was not in a position to re-make the decision and remitted the case to a differently constituted FTT for reconsideration.
Reporting of financial account information and card sales data to HMRC – regulations
On 3 November 2026, HM Treasury laid the Data-gathering (Ongoing Data: Interest and Payment Card Transactions) Regulations 2026 (SI 2026/1152) before the House of Commons. The regulations are made under powers conferred by Schedule 23 to the Finance Act 2026 as part of planned reforms to HMRC’s third-party bulk data gathering powers. They will introduce new standing reporting obligations on in-scope financial institutions and providers of payment card acquisition services to provide HMRC with interest income and card sales data on an ongoing basis without the need for HMRC to issue an individual notice. HMRC have also published a collection of documents relating to the regulations, including reporting schemas and supporting guidance. HMRC state that they will work collaboratively with stakeholders to update guidance during the 18-month lead-in period between now and the policy going live in April 2028.
Frasers Group Financial Services Limited: Input tax attribution
Frasers Group Financial Services Limited (previously Studio Retail Limited) sold a wide range of goods through catalogues and online. Studio’s business model was to provide integrated supplies of goods and credit, with most customers paying for goods on credit, the majority incurring interest. Credit interest during the relevant period amounted to approximately 20%-24% of total revenues. The case considered whether VAT incurred on the costs of producing photographs of the goods which appear in the catalogues/online was attributable only to Studio’s taxable supplies of goods (therefore recoverable in full), or, as HMRC contended, partly to the exempt supplies of credit (therefore residual), and if residual, the appropriate apportionment methodology. The First-tier Tribunal (FTT) has held that Studio’s photography and modelling costs were residual marketing costs attributable to both taxable goods and exempt credit supplies.
Considering the photographs’ objective use, the FTT found that although the photographs primarily described products, their context mattered – references to the credit offering featured prominently on some catalogue/website images, and it was artificial to treat only the accompanying text as promoting credit. The FTT distinguished Littlewoods Limited, where credit information appeared discreetly. (The FTT rejected HMRC’s alternative contention that Studio’s integrated, symbiotic retail/credit business meant that there was a link between the costs and the supplies of credit.) Having reached this determination, the FTT focused on the appropriate apportionment methodology. The FTT found that, whilst not perfect, the standard turnover-based partial exemption method produced a more precise apportionment, without significant distortion, than Studio’s proposed alternative partial exemption special methods (PESMs), which sought to estimate lifetime interest from current purchases for actual receipts, or exclude interest from defaulting customers. The FTT also rejected Studio’s appeal against HMRC’s rejection of a previous PESM and its contention that two of HMRC’s assessments were made out of time. Studio’s appeal was dismissed. (Contact: Andrew Clarke)
EMEA Dbriefs webcasts
The next EMEA Dbriefs webcast will take place on Wednesday 11 November 2026 at 12.00 GMT/13.00 CET. In UK Tax update – November, we will discuss topical tax developments of relevance to UK businesses in relation to corporate taxes, employment taxes and indirect taxes