4 September 2026
Corporation tax late filing penalties: automatic notices resume
In Issue 146 of HMRC’s Agent Update, published on 20 August 2026, HMRC announced that the automatic issue of penalty notices for late filed corporation tax returns has resumed. HMRC paused the automatic issue of notices while its systems were updated to reflect the increased penalties applying to corporation tax returns with filing dates on or after 1 April 2026. HMRC note that some businesses who filed late may receive notices later than usual while processing returns to normal.
HMRC manuals: substantial shareholdings exemption and EU-UK inbound migrations
On 19 August 2026, HMRC updated their Capital Gains Manual (see CG53080A) to set out their view that section 184J Taxation of Chargeable Gains Act 1992 (which applies when a company migrates to the UK from the EU and its assets were subject to an EU exit charge) does not constitute a ‘deemed disposal and reacquisition’ for the purposes of the substantial shareholdings exemption’s holding period requirement.
The updated manual page states that “the holding period is not affected where a company migrates to the UK and has been subject to an “EU exit charge” and is treated as acquiring its assets at market value for corporation tax purposes under section 184J TCGA 1992. That rule does not provide for the deemed disposal and reacquisition as required by TCGA1992/Sch7AC/Para11.”
Cogefin: Bermuda-incorporated company was UK resident
On 30 July 2026, the First-tier Tribunal (FTT) issued its decision in the corporation tax case Cogefin (Bermuda) Limited & Anor v HMRC. The FTT dismissed the substantive appeal on residence but partially allowed the appeal in relation to penalties and allowed the appeal against a personal liability notice. The key issue was whether a Bermuda-incorporated company (‘Cogefin’, the first appellant) was resident in the UK by virtue of UK domestic case law, i.e. whether its place of ‘central management and control’ was in the UK. In its decision, the FTT sets out detailed findings of fact on how the company was managed and controlled, and compares the role of the company’s Bermudian-resident directors, who worked for a local law firm, with the involvement of a UK-based individual (‘Mr Ciardi’, the second appellant), the economic settlor and beneficiary of the trust that owned the company. Mr Ciardi was not a director of Cogefin and was self-described as an ‘investment advisor’ to the company.
The FTT found that the strategic, high-level, decision making of the business rested with Mr Ciardi and not with Cogefin’s directors, who did not make the relevant decisions at the level required for central management and control to be located in Bermuda. Instead, the directors (or the administrative staff working with them) undertook administrative functions to ensure that Cogefin could and did undertake Mr Ciardi’s proposals. The “very few instances” where the directors appeared to have made a relevant decision were insufficient to render Cogefin dual resident in the UK and Bermuda. As a result, Cogefin was resident in the UK only.
HMRC publish Guidelines for Compliance 19: Help with short-term business visitors
On 13 August 2026, HMRC published the latest in their Guidelines for Compliance (GfC) series. GfCs are intended to help taxpayers and their advisers understand HMRC’s view on particular issues and include best practice examples. New GfC19, Help with short-term business visitors, is aimed at UK employers with overseas employees carrying out duties in the UK on a short-term basis. The GfC explains PAYE, income tax and national insurance obligations, common errors, and the records employers should keep.
Advisory fuel rates
On 21 August 2026, HMRC published the new advisory fuel rates for company cars applicable from 1 September 2026. The previous mileage rates, effective from 1 June 2026, can be used for up to one month from the date the new rates apply. The rate for petrol engines sized over 2000cc has increased by 1 penny. The rates for diesel engines sized 1601cc to 2000cc and over 2000cc, and LPG engines sized over 2000cc, have each decreased by 1 penny. The rates for all other petrol, diesel and LPG engine sizes are unchanged. The advisory electricity rates for home charging and public charging remain unchanged from the previous quarter.
OECD publishes updated corporate tax statistics
The OECD has released the 2026 edition of its annual Corporate Tax Statistics report and accompanying database. The report and database provide internationally comparable statistics covering more than 170 jurisdictions, supporting analysis of corporate taxation generally and base erosion and profit shifting (BEPS) in particular. The OECD highlights that corporate tax rates have remained stable across G20/OECD Inclusive Framework member countries, with an average combined statutory rate of around 21.2% in 2020 and 2026, with slight variations in the intervening years.
Revenue and Customs Briefs
HMRC have published Revenue and Customs Brief 7 (2026) on changes to the VAT Capital Goods Scheme (CGS). From 29 July 2026, computers and items of computer equipment have been removed from the list of assets covered by the CGS, and the expenditure threshold for land, buildings, and civil engineering work has increased from £250,000 (exclusive of VAT) to £600,000 (exclusive of VAT). HMRC’s VAT Notice 706/2, Capital Goods Scheme, has also been updated.
HMRC have also published Revenue and Customs Brief 9 (2026) (RCB), on the VAT treatment of supplies of education by alternative providers of higher and further education, following the Court of Appeal’s decision in St Patrick’s International College Limited & Ors that VAT exemption applied to services supplied by St Patrick’s and two other higher education providers, even though they were not ‘eligible bodies’, on the basis of fiscal neutrality. The RCB states that HMRC policy remains that exemption does not apply to supplies of education by providers that are not ‘eligible bodies’. HMRC have been granted permission to appeal to the Supreme Court, but recognise that businesses may want to protect their position pending the outcome of the appeal, so alternative providers that consider themselves to be in the same position as St Patrick’s International College can submit a claim for a refund of VAT, which HMRC will review on a case-by-case basis.
EMEA Dbriefs webcasts
The next EMEA Dbriefs webcast will take place on Wednesday 9 September 2026 at 12.00 BST/13.00 CEST. In Navigating the EU tax simplification package: key changes under the omnibus and DAC recast, our panel will discuss the proposals under the European Commission’s EU tax simplification package. We will cover the proposed amendments to EU directives under the direct taxation Omnibus, including the modernisation of interest limitation rules and simplification of withholding tax procedures, as well as the recast of the Directive on Administrative Cooperation (DAC).
On Thursday 10 September 2026 at 9.00 EST/14.00 BST/15.00 CEST, Deepinder Lamba will be hosting The strategic imperative of reward communication. In the webcast, our panel will discuss why effective reward communication has moved from a nice-to-have to a business-critical priority in today's competitive talent landscape. We will cover the strategic case for effective reward communication, communicating the full employee value proposition, harnessing technology and storytelling, and equipping line managers for impactful conversations, while also providing practical next steps.