Monthly Tax Update

Autumn Budget to be held on 26 November 2025

A reminder that the Chancellor of the Exchequer, Rachel Reeves, will present her Budget on Wednesday 26 November 2025. This will be accompanied by an update from the Office for Budget Responsibility (OBR) on the latest state of the country’s finances. 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, hosted by Amanda Tickel, Deloitte’s Global Head of Tax and Trade Policy, during which our panel of experts will provide an update on the previous day’s announcements and their implications for businesses and individuals.

HMRC appoint Research and Development Expert Advisory Panel

HMRC have announced the appointment of a new Research and Development Expert Advisory Panel (RDEAP) to provide sectoral insight and guidance to support the administration of R&D tax reliefs. The establishment of a panel was first announced at Spring Budget 2024, and the new government confirmed that it would proceed with the RDEAP in the Corporate Tax Roadmap. The RDEAP includes six external appointees from across business, as well as representatives from HMRC and other government departments. The panel’s role includes providing insights into cutting-edge R&D to enhance HMRC’s understanding, reviewing existing guidance, and providing sectoral feedback to HMRC on R&D tax reliefs.

UK lists of countries with qualified status for Pillar Two purposes updated

HMRC have updated their notice to specify further countries with a qualified income inclusion rule (IIR) and/or a qualifying domestic top-up tax (QDMTT) that meets safe harbour standards. The update follows changes to the OECD Inclusive Framework’s central record of countries whose local implementation of the Pillar Two rules have so far been assessed as ‘qualified’ in August 2025. Additions to HMRC’s list of countries with a QDMTT that meets safe harbour standards include Brazil, Gibraltar, the Isle of Man, Japan and Singapore. Additions to the list of countries with a qualified IIR include Gibraltar, the Isle of Man, Jersey, Singapore and Switzerland.

New UK-Portugal double tax treaty published

HMRC have published the English language text of the new UK-Portugal Double Taxation Convention and Protocol, signed on 15 September 2025. The new treaty includes several changes of note when compared to the existing 1968 UK-Portugal Double Taxation Convention­ (as modified by the BEPS Multilateral Instrument), including to the dividends, interest, and capital gains articles. A draft Statutory Instrument has been laid before the House of Commons in respect of the treaty. The next stage in the UK ratification process is consideration by a House of Commons Delegated Legislation Committee. The new treaty will enter into force after both countries complete their domestic parliamentary procedures for ratification and notify each other accordingly. Following ratification, individual articles will then take effect in the UK and Portugal in accordance with the timings set out in Article 28.

Welsh Budget presented

The Welsh government has presented its proposed Budget for the 2026-27 tax year. As in previous years, the Welsh government proposes to keep the devolved rates of income tax applicable to the non-savings, non-dividend income of taxpayers resident in Wales aligned with England and Northern Ireland. While no changes are proposed to the residential and non-residential rates and thresholds for Land Transaction Tax (LTT), the government announced plans to make further changes to Multiple Dwelling Relief (MDR). In addition, a new refund rule for the higher residential rates of LTT will be introduced and will apply where a private landlord leases a dwelling to a local authority through Leasing Scheme Wales. The government also announced plans to review the effectiveness of the existing LTT relief for registered social landlords and consider the appropriateness of an equivalent relief for local authorities buying property for social housing purposes.

OECD publishes updated transfer pricing country profiles

The OECD has published updated transfer pricing country profiles reflecting the current transfer pricing legislations and practices of various countries, including the UK. According to the OECD, the profiles focus on countries' domestic legislation regarding key transfer pricing aspects, including the arm's length principle, methods, comparability analysis, intangible property, intra-group services, cost contribution agreements, documentation, administrative approaches to avoiding and resolving disputes, safe harbours and other implementation measures. The updated profiles include new sections on the simplified and streamlined approach for baseline marketing and distribution activities (resulting from the work on Amount B of Pillar One) and the transfer pricing treatment of hard-to-value intangibles.

Northumbria Healthcare NHS Foundation Trust: VAT and hospital car parking

Northumbria Healthcare NHS Foundation Trust (the Trust) considered that its provision of paid-for hospital car parking was not chargeable to VAT. HMRC disagreed, and the First-tier Tribunal (FTT) and then the Upper Tribunal dismissed the Trust’s appeals. The Court of Appeal found in favour of the Trust on the basis that the Trust was not a taxable person in respect of this activity as it was acting as a public authority under a ‘special legal regime’, and that this would not lead to a significant distortion of competition. The Supreme Court has overturned this judgment.

When determining whether a public body is acting under a special legal regime, the question is whether there is a legal obligation that governs or materially affects the way the body’s activity must be carried out. The Department of Health guidance on hospital car parks that the Trust followed did not impose legal obligations. Accordingly, the Supreme Court concluded that the Trust was not acting under a special legal regime. Given this finding, the distortion of competition point did not arise, but the Court went on to address it, and found that to treat the Trust as non-taxable would distort competition. The car parking was not restricted to hospital users, and the FTT had found that there was actual competition between the Trust’s car parks and nearby parking provided by private operators. This conclusion was one that the FTT was entitled to reach on the evidence before it. HMRC’s appeal was allowed.