10 July 2026
On 16 June 2026, HMRC published a technical consultation on the expected new UK transfer pricing requirement: the International Controlled Transactions Schedule (ICTS). Under the ICTS, entities will provide HMRC with cross-border related-party transactional data in a structured format annually. The rules are expected to apply for accounting periods starting on or after 1 January 2027. Views are sought by 31 July 2026 on draft regulations and a draft statutory notice, setting out the core reporting rules and information requirements. A draft template has also been published, illustrating the information that would need to be filed. For further information, please read our transfer pricing alert.
HMRC have announced that, following extensive engagement with stakeholders, the planned introduction of mandatory PAYE real-time reporting of income tax and Class 1A NICs on certain benefits in kind and taxable expenses from April 2027 will now be phased in. From 6 April 2027, mandatory payrolling will now only be introduced for a small number of benefits in kind (Phase 1), including company car, van, fuel, and medical benefits. Phase 2 will commence from 6 April 2028 and is expected to introduce mandatory payrolling of most other types of benefits in kind (excluding loans and living accommodation benefits which remain voluntary). HMRC have added a new page of guidance on the phased introduction approach to their collection of interim guidance on mandatory payrolling of benefits in kind.
HMRC have published new guidance, expanding and renaming their ‘Profit Diversion Compliance Facility’ (PDCF) as the ‘Transfer Pricing and Profit Diversion Compliance Facility’ (TP&PDCF). The facility was introduced in 2019 to provide an opportunity for businesses within the scope of Diverted Profits Tax (DPT) to bring their UK tax affairs up to date by making a disclosure to HMRC. The updated facility reflects the withdrawal of DPT by Finance Act 2026, and the introduction of replacement Unassessed Transfer Pricing Profits (UTPP) rules, with effect from 1 January 2026. It also broadens the scope of the original facility to include all significant non-financial transfer pricing risks. For further detail, please see our alert.
The government has advanced legislation to increase the Electricity Generator Levy (EGL) rate from 45% to 55%, effective from 1 July 2026. This measure, initially announced in April, was formally introduced as part of the Taxation (Energy and Vehicles) Bill. The Bill, which also includes provisions for two vehicle taxation changes relating to approved mileage allowance rates for 2026/27 and a temporary vehicle excise duty exemption for certain heavy goods vehicles, was published on 24 June 2026. It successfully completed all stages in the House of Commons on 1 July 2026 without amendment and has now moved to the House of Lords, where it is expected to conclude its remaining stages by 14 July 2026.
On 23 June 2026, the government released its Tax update 2026: simplification, modernisation and fairness, a package of tax policy announcements and consultations, primarily focusing on individuals, indirect taxes, and customs duties. In respect of corporation tax, it included plans to prevent certain R&D and creative sector credits from triggering corporation tax quarterly instalment payments.
HMRC has also published its Transformation Roadmap - Progress Update 2026, detailing the first year's advancements towards a more efficient tax system. The update highlights significant progress in digital services, with 78% of customer interactions now digital and a substantial increase in HMRC app and Personal Tax Account users. It also covers developments in compliance, including the introduction of Making Tax Digital for income tax and HMRC’s increased use of AI.
The Court of Appeal has agreed with HMRC that supplies by Bolt Services UK Limited of private hire vehicle ride-hailing services did not fall within the tour operators’ margin scheme (TOMS). The Upper Tribunal (UT) and First-tier Tribunal (FTT) had previously held that Bolt’s supplies were within TOMS. HMRC appealed against the FTT and UT decisions, and the Court of Appeal has accepted HMRC’s primary argument that, contrary to the ‘high-level’ approach taken by the FTT and UT, the correct approach when considering the application of TOMS is to ask whether the supply in question is identical or at least comparable to the supplies of tour operators and travel agents. The Court found that Bolt’s services were not identical or comparable. Comparability must be assessed by reference to the aims of TOMS, namely that of preventing distortions of competition and inconsistent VAT treatment for truly similar services. HMRC’s secondary argument was that the FTT and UT had erred in concluding that the supplies made by drivers to Bolt were not ‘materially altered’ by Bolt and that Bolt’s supplies to its customers were not ‘in-house’ supplies. If the supplies were materially altered or in-house supplies, they would be outside the scope of TOMS. Given the Court’s conclusion on the primary argument, it did not need to consider HMRC’s secondary argument, and it allowed HMRC’s appeal. Bolt is seeking permission to appeal to the Supreme Court.
HMRC have published a policy paper on the simplification of the Capital Goods Scheme. The measures, which are intended to reduce the administrative burden for VAT-registered businesses, remove computers and items of computer equipment from the list of assets covered by the scheme, and the expenditure threshold for land, buildings and civil engineering work will increase from £250,000 (exclusive of VAT) to £600,000 (exclusive of VAT). The measures come into force from 29 July 2026. Existing assets and expenditure incurred before that date will continue to be treated under the current rules. SI 2026/765: The Value Added Tax (Amendment) Regulations 2026 has been made to implement these changes. (Contact: Ben Tennant)
We have two Dbriefs tax webcasts scheduled next week: Global trade update: managing evolving supply chains, customs, and sustainability, (13 July 2026) and Private company reward: Strategies from inception to maturity (16 July 2026). Please visit our Dbriefs website for more information, and to view any other recent webcasts on demand.