24 April 2026
Government announces increase to Electricity Generator Levy rate
On 21 April 2026, the Exchequer Secretary to the Treasury, Dan Tomlinson MP, announced an increase in the rate of the Electricity Generator Levy (EGL) from 45% to 55%, with effect from 1 July 2026. The EGL will also be extended past its scheduled conclusion in 2028; however, the length of the extension has not yet been confirmed.
Court of Appeal dismisses HMRC’s appeal on application of treaty main purpose test
The Court of Appeal (CA) has unanimously dismissed HMRC’s appeal in Burlington Loan Management DAC which considers whether a payment of UK-sourced interest, arising on a debt assigned to an Irish resident taxpayer, was prevented from qualifying for relief from UK withholding tax under the 1976 UK-Ireland Double Tax Convention due to a main purpose test within the treaty’s interest article (Article 12).
The debt was previously held by a creditor resident in a jurisdiction which did not have a tax treaty with the UK. Prior to the payment of interest, the debt was purchased by an unrelated Irish resident company, Burlington, with the price paid reflecting an assumption that treaty relief would be available. HMRC considered that the interest article’s main purpose test (as it stood at the time, prior to being replaced under the BEPS Multilateral Instrument) was met – i.e. that a main purpose of a person concerned with the assignment of the debt-claim was ‘to take advantage of’ the interest article – and so refused Burlington’s claim for a refund of the approximately £18.1 million of UK tax withheld on payment of the interest.
The CA rejected HMRC’s interpretation of the test and the meaning of ‘to take advantage of’ in the context of the article. Citing the CA’s decision in Vietjet Aviation JSC, it held that the phrase must mean obtaining the benefit of the article in a way that is contrary to the object and purpose of the treaty. Burlington was an independent entity, acting at arm’s length through a market purchase. Therefore, the Upper Tribunal identified the correct starting point for the analysis, that by Article 12(1) of the treaty, Burlington, as a resident of Ireland and the beneficial owner of the debt, should only be taxed on the interest payable in Ireland. Burlington’s reliance on Article 12(1) was entirely in accord with the objects and purposes of the treaty, i.e. to promote the movement of capital between the UK and Ireland by the elimination of double taxation.
HMRC designate Borsa Istanbul and Taiwan Stock Exchange as recognised stock exchanges
On 21 April 2026, HMRC updated their guidance page Designated recognised stock exchanges which sets out exchanges worldwide that are ‘recognised stock exchanges’ in the UK for the purposes of section 1005 Income Tax Act 2007. The Borsa Istanbul, based in Turkey, and the Taiwan Stock Exchange, based in Taiwan, have been added with a date of recognition of 14 April 2026. According to HMRC, shares and securities admitted to the specified segments of the Borsa Istanbul’s Equity Market and Debt Security Market, and to the Taiwan Stock Exchange’s Main Board and Taiwan Innovation Board (TIB), are likely to meet the section 1005 Income Tax Act 2007 definition of ‘listed on a recognised stock exchange’.
HMRC publish MLI synthesised texts of UK tax treaties with Croatia, Mexico and Qatar
HMRC have published new ‘synthesised texts’ showing how the operation of the 2015 UK-Croatia Double Taxation Agreement, 1994 UK-Mexico Double Taxation Convention and Protocol, and the 2009 UK-Qatar Double Taxation Convention and Protocol are modified by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the ‘MLI’).
Clearwater Hampers Limited: VAT and hampers
Clearwater Hampers Limited appealed against HMRC’s decision to refuse a claim for the repayment of output tax on supplies of food and drink gift hampers which came packaged in a lidded wicker basket. Clearwater Hampers considered that the lidded baskets in which food and drink were packaged did not constitute separate standard-rated supplies, as HMRC contended, but rather should share the same VAT treatment as the food and drink. The food and drink in the lidded baskets included standard-rated and zero-rated items, and Clearwater Hampers applied a composite VAT rate, based on the relative values of the food and drink items. The First-tier Tribunal (FTT) has agreed with Clearwater Hampers.
The FTT considered that the average purchaser would not consider the lidded baskets to be an aim in themselves. The lidded baskets presented and protected the food and drink, and were a means of better enjoying them as the gift that the purchaser intended to give. Accordingly, the supply of the lidded basket was ancillary to the food and drink, and shared their VAT treatment. The composite VAT rate should be determined from the relative values of the standard-rated and zero-rated food and drink items. The FTT allowed Clearwater Hampers’ appeal. (Contact: Andrew Roberts)
EMEA Dbriefs webcasts
The next EMEA Dbriefs webcast will take place on Thursday 21 May 2026 at 12.00 BST/13.00 CEST. In Navigating the global shift to e-invoicing: preparing for the next 18 months, our panel will cover the significant transformation of the tax and finance landscape, with e-invoicing adoption the norm across EMEA. We will discuss the challenges ahead including compliance, technology, and operational changes required by tax, finance and IT functions, with a particular focus on France’s e-invoicing. We will also look beyond compliance at opportunities for enhanced operational efficiency, reduced processing costs, improved data accuracy, and real-time visibility into financial transactions to deliver strategic assets.