6 March 2026
Spring Statement
The Chancellor of the Exchequer Rachel Reeves MP delivered her Spring Forecast 2026 speech to Parliament on 3 March 2026. In line with the government’s policy to deliver just one major fiscal event a year, i.e. the annual Budget each autumn, the speech contained no tax announcements. At Budget 2025, the government stated that it would “announce further changes to simplify and improve tax and customs administration at a Tax Update in early 2026.”
Finance Bill progress update
As a reminder, the remaining Commons stages of Finance (No. 2) Bill 2024-26 (Report Stage and Third Reading) are provisionally scheduled for Wednesday 11 March 2026. Ahead of the Report Stage, the government has tabled three new clauses (‘NC5’ to ‘NC7’) and 55 new amendments (labelled ‘Gov 12’ to ‘Gov 66’).
The new clauses relate to certain offshore income gains and the abolition of the pensions lifetime allowance charge. The amendments affect a range of the Bill’s provisions, including those on inheritance tax and pensions, changes to the tax treatment of carried interest, umbrella companies, and permanent establishments reforms. The House of Lords has provisionally scheduled its Second Reading and remaining stages for Tuesday 17 March 2026.
Regulations: repeal of shadow advance corporation tax rules
In 1999, advance corporation tax (ACT) was abolished, and a mechanism introduced to allow businesses with 'unrelieved surplus ACT' balances to obtain relief against corporation tax in subsequent accounting periods in certain circumstances. This mechanism, inter alia, introduced the ‘shadow ACT rules’, which were designed to limit the amount of relief a business could obtain to pre-abolition rates.
In line with the government’s announcement at Budget 2025 that it would legislate to repeal the shadow ACT rules, HM Treasury has laid the Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) (Amendment) Regulations 2026 before the House of Commons. HMRC have published an associated tax information and impact note, which states that, with effect for accounting periods ending on or after 1 April 2026, the measure will “repeal the shadow ACT rules so that unrelieved surplus ACT balances may be offset against Corporation Tax liabilities without these restrictions.” All remaining shadow ACT balances will be extinguished.
Regulations: mandatory payrolling of benefits in kind
The mandatory payrolling of benefits in kind is due to commence from 6 April 2027. From this date, employers will need to report and pay income tax and class 1A national insurance contributions on benefits in kind via payroll software, subject to a few limited exceptions. Ahead of this change, on 2 March 2026, HM Treasury laid The Income Tax (Pay As You Earn) (Amendment) Regulations 2026 which, inter alia, remove the option for employers to voluntarily register for payrolling benefits in kind for the tax year 2027-28 onwards. The regulations will come into force on 6 April 2026.
In addition, the regulations, along with The Social Security (Contributions) (Amendment) Regulations 2026, put into statute a filing concession for employers (or insolvency practitioners acting on their behalf) who cease to trade during the tax year, allowing them to submit paper P11D and P11D(b) returns to HMRC for the year of cessation mid-year. HMRC have published an associated tax information and impact note.
Charge My Street Limited: Reduced VAT rate for public EV charging
Charge My Street Limited (CMS) supplies electric vehicle (EV) charging to EVs at its charging stations in public places. CMS considered the reduced VAT rate of 5% applied to its supplies, on the basis that they fell within the de minimis limit for supplies of electricity and so were deemed to be for “domestic use”. HMRC ruled that the standard rate applied. The First-tier Tribunal (FTT) has agreed with CMS.
Under Note 5(g), Item 1, Group 1, Schedule 7A of the VAT Act 1994, the provision of electricity to a person at any premises at a rate not exceeding 1000 kilowatt hours (kWh) a month is deemed to be for “domestic use”. The FTT found that, contrary to HMRC’s arguments, “premises” did not require any concept of legal ownership by the recipient of the electricity, nor was it confined to buildings, but could include defined public spaces, such as car parks. HMRC also argued that the “rate” at which electricity is provided must be calculated by reference only to the period during which the electricity was actually being provided, except for what HMRC referred to as continuous supply contracts. The FTT disagreed, accepting CMS’s approach that the limit is measured simply in terms of how much electricity is provided by a supplier to a person at any premises in the month in question, which for public EV charging would almost always be under the 1000 kWh limit. Accordingly, the FTT allowed CMS’s appeal in principle. (Contact: Oliver Jarratt)
EMEA Dbriefs webcasts
The next EMEA Dbriefs webcast will take place on Tuesday 17 March 2026 at 12.00 GMT/13.00 CET. In EU Public Tax Reporting requirements in 2026, hosted by Mark Kennedy, our panel will discuss the EU Public Country by Country Reporting (PCBCR) requirements. We’ll explore the PCBCR rules, including potential early reporting requirements; commercial, tax and other reputational risks in relation to the disclosures; approaches to gathering CBCR data; technology options for gathering, verifying and reporting data; and choices which could potentially mitigate the compliance burden on businesses.