5 December 2025
Finance Bill published
The text of Finance (No. 2) Bill 2024-26 was published on 4 December 2025, together with its Explanatory Notes. The Bill’s dedicated pages on Parliament’s website are here.
The Bill had its First Reading in the House of Commons on 2 December 2025 following the conclusion of MPs’ debate on the Budget and their approval of the Budget’s Ways and Means Resolutions. The Bill’s Second Reading is scheduled to take place on 16 December 2025.
Reforms to transfer pricing, permanent establishments, and Diverted Profits Tax legislation
Finance (No. 2) Bill 2024-26 contains reforms to the UK’s transfer pricing, permanent establishments and Diverted Profits Tax legislation. The changes are, in most cases, due to take effect for accounting periods commencing on or after 1 January 2026. The Finance Bill also includes primary legislation to enable HMRC to introduce a new transfer pricing reporting requirement from 2027: the ‘International Controlled Transactions Schedule’. For more details, please see our alert here.
Primary legislation for charging NICs on salary-sacrificed pensions contributions published
At Budget 2025, the government announced that salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from National Insurance contributions (NICs) from April 2029. After the change, salary-sacrificed pension contributions above £2,000 will be subject to both employer and employee NICs.
On 4 December 2025, the text of the National Insurance Contributions (Employer Pensions Contributions) Bill was published together with its Explanatory Notes. According to the Bill’s Explanatory Notes, it will create a power for the Treasury to apply NICs to salary-sacrificed pension contributions that exceed £2,000 per annum from April 2029. The Bill had its First Reading in the House of Commons on 4 December 2025 and its Second Reading is scheduled for 17 December 2025. HMRC have also published an associated Tax Information and Impact Note (TIIN), which states that details on the design and operation of the £2,000 contribution limit will be set out in secondary legislation, following stakeholder engagement.
UK treaty ratification progress update: Andorra, Peru, Portugal and Romania
Since November 2024, the UK has signed new double tax treaties with Andorra, Peru, Portugal and Romania. The two most recent steps in the UK ratification process for each of these treaties – consideration of the draft statutory instrument by a delegated legislation committee and approval of the draft Order by the House of Commons – took place on 1 and 2 December 2025.
One step now remains in the UK ratification process: the formal making of the Order by the Privy Council. Once the UK and the relevant counterparty country have both completed their domestic ratification procedures, they will need to notify each other accordingly. Each treaty will then enter into force and have effect in line with the provisions in its entry into force article.
Joint statement on automatic exchange of readily available information on immovable property for tax purposes
On 4 December 2025, 26 jurisdictions including the UK announced their intention to implement a new international framework for the automatic exchange of information on immovable property, the Multilateral Competent Authority Agreement on Automatic Exchange of Readily Available Information on Immovable Property (IPI MCAA). A report containing the text of the IPI MCAA, which could facilitate the exchange of ‘readily available information’ on immovable property transactions, holdings and recurrent income between tax authorities, was published by the OECD in October 2025.
In a joint statement the jurisdictions welcome the new IPI MCAA and state their aim to join by 2029 or 2030, subject to any domestic procedures. The OECD states that it will work with participating jurisdictions on implementation, with first exchanges expected to commence in 2029.
EMEA Dbriefs webcasts
As a reminder, the next EMEA Dbriefs tax webcast will take place on Tuesday 9 December 2025 at 13.00 GMT/14.00 CET. In Off payroll workforce tax and legal risk, our panel will discuss upcoming reforms to tax legislation for labour supply chains involving intermediaries, which will make businesses joint and severally liable to account to HMRC for employment taxes liabilities of third-party employees. We will highlight practical steps organisations could take, explore the draft legislation, discuss connected tax and legal matters, and set out a potential roadmap for businesses.