26 September 2025
HMRC update their guidance on National Insurance for Internationally Mobile Employees
HMRC have updated their guidance for internationally mobile employees (IMEs) who are not covered by international social security agreements, clarifying how they expect UK domestic law on National Insurance Contributions (NICs) to be applied to them in the context of any trailing reward (e.g. bonuses or other incentives taxed as earnings). The key question is whether the liability to NICs should be determined as an all or nothing charge, depending on whether payment was within or outside the UK-insured period, or whether an apportioned liability should be applied, regardless of whether the employee was within scope of NICs at the date of payment. While different treatments have been applied and accepted by HMRC in the past, the updated guidance indicates that apportionment is and always has been the correct interpretation of the law in HMRC’s view and should be applied. Where employers find that NICs for IMEs have been over or underpaid in light of the update, HMRC are advising them to make any corrections needed through Real Time Information (RTI).
One-to-many campaign – patent box claims
The ICAEW has reported that HMRC have launched a ‘one-to-many’ letter campaign, aimed at companies that have claimed a patent box deduction. The letter asks recipients to read Guidelines for Compliance 9 (GfC9) – Help with Patent Box computations, focussing on the ‘information to include with your return’ and ‘record keeping’ sections. It requests that companies making patent box claims include any supporting information and calculations with their corporation tax computations, or in a patent box report as a PDF document, when they submit their next company tax return. The letter states that while GfC9 is “guidance only”, HMRC are asking companies to do this “voluntarily” and that by doing so the company will help HMRC to process deductions more quickly and avoid delaying any tax repayments due. HMRC acknowledge that the amount of supporting information required will vary depending on the facts and circumstances.
HMRC publish Guidelines for Compliance on Freeports
On 25 September 2025, HMRC published the latest in their Guidelines for Compliance (GfC) series. New GfC14, Help with Freeports, sets out the tax reliefs and customs benefits of Freeports. HMRC state that references to Freeports in GfC14 include Freeports in England and Wales, as well as Scottish Green Freeports, unless specific differences are noted. GfC14 explains how to qualify for the tax reliefs and customs benefits, highlights common errors, and advises what records should be kept. HMRC state that their policy has not changed and that the guidelines should be read alongside their published guidance.
HMRC restart direct recovery of debts
On 22 September 2025, HMRC updated their issue briefing Direct Recovery of Debts to announce that they have restarted their use of direct recovery of debts (DRD) “in a ‘test and learn’ phase”, in line with the government’s announcement at Spring Statement 2025. DRD allows HMRC to recover debts of £1,000 or more directly from debtors’ bank accounts and cash ISAs, subject to a number of safeguards. HMRC state that DRD “is used when an individual or business can afford to pay what they owe but are choosing not to” and note that it was only used 19 times in two years, before the mechanism was paused during the COVID-19 pandemic.
HMRC publish Corporation Tax Statistics 2025
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 2024-25 tax year, and tax liabilities up to the 2023-24 tax year. Total receipts from all corporate taxes increased by 4% in 2024-25 to £97.2 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.
HMRC publish MLI synthesised text of Tunisia tax treaty
On 25 September 2025, HMRC published a new ‘synthesised text’ showing how the operation of the 1982 UK-Tunisia Double Taxation Convention is modified by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the ‘MLI’).
Proposed timings for Scottish and Welsh Budgets
On 22 September 2025, the Finance and Public Administration Committee of the Scottish Parliament published a letter from the Scottish Cabinet Secretary for Finance and Local Government, Shona Robison MSP. In the letter, Robison states that she is minded to propose Thursday 15 January 2026 as the publication date for the Scottish Budget and associated documents. She notes that a December publication date (as is usually the case) would leave the Scottish government with only four working days to assess the implications of the UK Autumn Budget. At the time of writing, the date had not been confirmed formally.
The current stated timing for the Welsh Government Budget 2026-27 is that an outline draft Budget will be published on 14 October 2025, with a more detailed draft Budget published on 3 November 2025. The final Budget is due to be published on 20 January 2026 and debated on 27 January 2026.
Isle of Wight NHS Trust: VAT treatment of supplies of locum doctors
HMRC issued a decision in August 2021, to Isle of Wight NHS Trust (the Trust), that the supply of locum medical practitioners to the Trust by agencies was not an exempt supply under Item 5, Group 7, Schedule 9, VATA 1994, which exempts “the provision of a deputy for a person registered in the register of medical practitioners”. The Trust’s appeal against the decision was designated as a lead case, with 20 appeals stayed behind it. The First-tier Tribunal (FTT) has held that the exemption applied.
Having first determined a number of preliminary/procedural issues, the FTT found that Item 5, according to its ordinary meaning, exempts the supply of a deputy, that is, a person appointed to act on another’s behalf, where that other person is registered in the register of medical practitioners. Nothing in the legislative or historical context to the taxation of such deputising services disapplies this ordinary meaning. The FTT also found that Item 5 is ultra vires the EU Principal VAT Directive (PVD), as it exempts a supply of staff and not the supply of medical care. The FTT concluded that it was not possible to apply a conforming interpretation (the Marleasing principle) to interpret Item 5 in accordance with the PVD (disagreeing with the FTT in Rapid Sequence Limited). To interpret Item 5 as requiring the provision of medical care would be contra legem (against the law). The FTT concluded that, on the basis of the evidence provided, the Trust had received services that should have been treated as exempt. The FTT allowed the Trust’s appeal. (Contact: Phil Simmons)
EMEA Dbriefs webcasts
As a reminder, the next EMEA Dbriefs tax webcast is on Tuesday 30 September 2025 at 13.00 BST/14.00 CEST. In Navigating tax disputes with HMRC through to resolution, hosted by Paul Dennis, our panel will discuss strategies for resolving disputes with HMRC and share case studies of complex disputes that have been resolved outside of litigation. We will discuss topics including establishing a framework of collaborative working, exploring alternative settlement parameters, and HMRC programmes to overcome impasses, including the use of Alternative Dispute Resolution (ADR).