12 June 2026
UK and New Zealand sign new double tax treaty
On 10 June 2026, HMRC updated their page New Zealand: tax treaties to state that a new UK-New Zealand double taxation convention was signed on 1 June 2026. The new agreement, which is not yet in force, will replace the existing 1983 UK-New Zealand Double Taxation Convention, as amended by the 2003 and 2007 protocols and the BEPS Multilateral Instrument. The new agreement includes, inter alia, a reduction to the existing 15% treaty dividend withholding tax rate to 5% where the beneficial owner is a company that owns at least 10% of the voting power for a 12-month period ending on the date of the dividend declaration. In some cases, the dividend withholding tax rate may be reduced to 0%.
The new agreement will enter into force and effect, in accordance with the timings in Article 28, only once both countries have completed their domestic parliamentary procedures for ratification and have notified each other accordingly.
HMRC launch consultation on UK resident individuals and reverse hybrids
On 10 June 2026, HMRC published a consultation titled UK resident individual members of LLCs and other reverse hybrids. The consultation considers solutions for UK resident individuals who are members of entities that are transparent in their jurisdiction of establishment but opaque in another jurisdiction (‘reverse hybrids’), such as US LLCs, potentially resulting in double taxation. Proposals under consideration include UK matching of the foreign tax treatment, with no income tax payable on distributions received from the entity. The consultation also requests views on alternative forms of relief, including relief for foreign tax suffered by way of deduction or credit. HMRC state that they do not intend to change the position for corporate members of such entities. The consultation closes on 31 July 2026.
HMRC guidance: VAT recovery on pension scheme services
Following the publication of Revenue and Customs Brief 4 (2025) (RCB 4 (2025)) in June 2025, HMRC have updated their guidance regarding the deductibility of VAT incurred on services relating to funded occupational pension schemes. The guidance has been published in HMRC’s VAT Input Tax Manual from VIT44600 to VIT44750. Prior to RCB 4 (2025), HMRC made a distinction between scheme-related ‘administration’ and ‘investment’ services, and generally accepted that the sponsoring employer of a scheme could treat the VAT incurred on ‘administration’ services as its input tax, provided the employer held an invoice addressed to it, even if the employer had not contracted for or paid for the services. HMRC also previously accepted that, where a third-party manager of a scheme provided both administration and investment services, the employer could treat 30% of the VAT as its input tax.
According to the updated guidance, HMRC now consider that to be able to recover the VAT charged on any scheme-related service, sponsoring employers must have directly contracted for that service. HMRC no longer recognise any distinction between administration and investment services, and the VAT Input Tax Manual guidance no longer includes the ‘70/30 split’. Finally, the updated guidance includes several references to ‘onwards supply’ arrangements, under which the scheme trustee(s) would receive the scheme-related services and would use them to make an onwards taxable supply to the employer (of running the pension scheme on the employer’s behalf). HMRC’s intention seems to be for employers and schemes to implement such arrangements in order to facilitate VAT recovery for the employer, although a number of issues would still need to be resolved. Although published on 4 June 2026, the updated guidance sets out HMRC’s policy from 18 June 2025, that is, the date of the RCB. (Contact: Alex Beattie)
EMEA Dbriefs webcasts
The next EMEA Dbriefs webcast will take place on Tuesday 16 June 2026 at 12.00 BST/13.00 CEST. In Your European cross border workforce: what’s changing, what matters, & what’s next? our panel will discuss Europe’s cross-border working landscape, focusing on the EU’s updated social security coordination framework and its implications for compliance, workforce planning, and managing short-term cross-border activity. We will also address open questions around remote work, multi-state workers, and UK–EU implications.
An EMEA Dbriefs webcast will also be taking place on Wednesday 17 June 2026 at 12.00 BST/13.00 CEST. In Operational excellence in global mobility: from risk management to quality assurance, hosted by Andy Cowen, our panel will explore the increasing importance of embedding robust risk management and quality assurance frameworks into global mobility programmes. We will discuss the complexities for organisations dealing with fast-evolving legislative and regulatory landscapes, compliance challenges (tax, immigration, and social security), and balancing employee duty of care obligations with delivering consistent high-quality employee experience and driving operational excellence.