3 October 2025
HMRC one-to-many campaign – management expenses
HMRC have launched a ‘one-to-many’ letter campaign, aimed at holding companies for overseas subsidiaries that have claimed ‘management expenses’. The letter aims to raise awareness of common issues relating to management expenses, which arise in relation to expenses benefiting connected parties. Where this is the case, HMRC state that it is often found that expenses should not have been deducted, or a transaction should have been recognised in accordance with the arm’s length principle. HMRC also highlight the distinction between such expenses and ‘shareholder costs’. The letter invites businesses to review their position against the guidance set out in the letter and HMRC’s manuals, and sets out next steps where inaccuracies are identified.
HMRC publish latest research and development tax credit statistics
On 30 September 2025, HMRC published the latest in their annual series of research and development (R&D) statistics: Research and Development Tax Credits Statistics: September 2025. The publication includes provisional statistics for R&D claims covering accounting periods ending in the 2023/24 tax year. Compared to the previous year, the provisional estimated amount of total R&D tax relief support claimed decreased by 2% to £7.6 billion, with R&D expenditure falling by 1% to £46.1 billion. While relief claimed through the small or medium-sized enterprise (SME) scheme is estimated to have decreased by 29% to £3.15 billion, support through the research and development expenditure credit (RDEC) scheme increased by 36% to £4.41 billion. HMRC estimate a 26% decrease in the total number of R&D claims for 2023/24 to 46,950, comprised of a 31% decrease in the number of SME scheme claims and a 5% decrease in the number of RDEC claims. The fall in the amount of relief claimed and claim volumes for the SME scheme is attributed to recent changes, including decreases in the SME scheme enhancement and credit rates. The statistics do not include the impact of the new merged RDEC or enhanced R&D intensive support (ERIS), which affect accounting periods beginning on or after 1 April 2024.
BEPS MLI: Argentina deposits instrument of ratification
The OECD has announced that Argentina deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS MLI) on 29 September 2025. The BEPS MLI will first enter into force in Argentina on 1 January 2026. The 1996 Argentina-UK Double Taxation Convention is included in both Argentina’s and the UK’s MLI positions, and thus modifications to the operation of that treaty will take effect in due course in accordance with the commencement provisions in Article 35 of the BEPS MLI and the commencement choices in Argentina’s position. It is expected that HMRC will update the relevant page on GOV.UK with a ‘synthesised text’ showing the effect of the MLI’s modifications on the treaty. The OECD’s list of all countries’ provisional or ratified MLI positions is available here.
Extended producer responsibility for packaging scheme
On 1 October 2025, the first payments were due under the extended producer responsibility (EPR) for packaging scheme. Under the scheme, producers must pay a fee for packaging supplied in or imported into the UK, either under a business’s own brand or another brand in various circumstances (such as an online marketplace). The fees differ depending on the type of packaging (i.e., plastic, glass, etc.). The money paid into the scheme will be paid out to local authorities to cover the costs of collecting, recycling, and disposing of household packaging waste. The intention is to incentivise businesses to reduce and recycle packaging. Businesses within the scheme were required to report packaging data, and register with their respective environmental regulator, by April 2025, with fees calculated on the basis of the reported data. From 2026, these fees will be modulated with higher fees for ‘red’ materials (i.e., more difficult to recycle) and lower fees for ‘green’ materials (i.e., easier to recycle). Initial guidance has been published on the mechanisms of this modulation method with further statements anticipated before it is implemented. (Contact: Ellie Newey)
EMEA Dbriefs webcasts
The next EMEA Dbriefs tax webcast is on Wednesday 8 October 2025 at 12.00 BST/13.00 CEST. In Unlocking the real benefits of AI, hosted by Sunny Sharma, our panel will discuss the potential for AI across HR, mobility, and payroll to unlock benefits for your organisation and people. We will cover topics including identifying and prioritising use cases, data as the currency, and navigating risks associated with GenAI.