8 May 2026
National Insurance Contributions Act – Royal Assent
The State Opening and King's Speech, in which the Government will set out its planned legislative programme for the next parliamentary session, will take place on 13 May 2026. As part of the ceremony marking the prorogation of parliament, the National Insurance Contributions (Employer Pensions Contributions) Bill, which creates a power for the Treasury to apply NICs to salary-sacrificed pension contributions that exceed £2,000 per annum from April 2029, was granted Royal Assent. The text of the Act has been published on legislation.gov.uk.
Supreme Court: capital allowances relating to technical study expenditure
The Supreme Court (SC) has unanimously allowed HMRC’s appeal in the capital allowances case Orsted West of Duddon Sands (UK) Limited and others. The taxpayers own and operate offshore windfarms, and the key issue in the case concerned whether expenditure on various studies, including surveys, conducted before the windfarms became operational, constituted qualifying expenditure “on the provision” of plant and machinery for the purposes of section 11 Capital Allowances Act 2001.
The First-tier Tribunal initially allowed some of the disputed expenditure as qualifying for capital allowances, but the Upper Tribunal (UT) overturned this decision in 2023, finding that none of the expenditure was qualifying. The Court of Appeal (CA) disagreed with the stricter interpretation adopted by the UT and found that the taxpayers’ expenditure on studies informing the design or installation of plant qualified for capital allowances, even if not directly involved in the physical construction. The SC has now overturned the CA’s decision, holding that the ordinary meaning of the requirement that the expenditure must be “on” the provision of plant indicates a narrow test, requiring a close connection between the expenditure and the plant provided. The SC did not reach a view on the exact boundary between costs that are incurred “on” the provision of plant, and those that do not meet the definition, however it held that the taxpayers’ costs of carrying out the studies and surveys did not fall close to that boundary. (Contact: Matt Smith, Steve Perry, Clare Donaldson or your usual capital allowances contact)
Court of Appeal dismisses HMRC’s appeal on application of treaty main purpose test
The Court of Appeal (CA) has unanimously dismissed HMRC’s appeal in Burlington Loan Management DAC which considers whether a payment of UK-sourced interest, arising on a debt assigned to an Irish resident taxpayer, was prevented from qualifying for relief from UK withholding tax under the 1976 UK-Ireland Double Tax Convention due to a main purpose test within the treaty’s interest article (Article 12).
HMRC considered that the main purpose test (as it stood at the time, prior to being replaced under the BEPS Multilateral Instrument) was met – i.e. that a main purpose of a person concerned with the assignment of the debt-claim was ‘to take advantage of’ the interest article – and so refused Burlington’s claim for a refund of the approximately £18.1 million of UK tax withheld on payment of the interest. The CA rejected HMRC’s interpretation of the test. Citing the CA’s decision in Vietjet Aviation JSC, it held that ‘to take advantage of’ in the context of the article must mean obtaining the benefit of the article in a way that is contrary to the object and purpose of the treaty. Burlington was an independent entity, acting at arm’s length through a market purchase, and its reliance on Article 12(1) was entirely in accord with the treaty’s objects and purposes.
First-tier Tribunal allows taxpayer’s appeal in football referee employment status case
The First-tier Tribunal (FTT) has allowed the taxpayer’s appeal in Professional Game Match Officials Limited v HMRC, concerning the employment status of certain football referees. The case discussed the application of the Ready Mixed Concrete (RMC) test for employment status. In 2024, the Supreme Court determined that the "irreducible minimum" for mutuality of obligation and control (RMC Limbs 1 and 2) was met for individual match engagements of the referees. However, the case was remitted to the FTT for a re-evaluation at RMC Limb 3, which required assessing the nature and extent of the mutual obligations and control within the overall multi-factorial assessment.
The FTT undertook a detailed discussion of the nature and quality of both mutuality and control as part of the RMC Limb 3 assessment. Despite the initial thresholds in RMC Limbs 1 and 2 being met, the FTT concluded that the characteristics of both mutuality and control, when viewed holistically, actively pointed away from an employment relationship. For instance, the control exercised by Professional Game Match Officials Limited (PGMOL) was deemed "regulatory, developmental and gatekeeping in character rather than managerial and supervisory," and the mutual obligations were found to be “narrow, episodic” and “permeated by choice”. Overall, the FTT found that at RMC Limb 3, the picture that emerged was one of self-employment and upheld PGMOL’s appeal.
OECD publishes Global Minimum Tax Implementation Toolkit
The OECD Forum on Tax Administration has published a Global Minimum Tax Implementation Toolkit in relation to the G20/OECD Inclusive Framework’s Pillar Two global minimum tax rules. The Toolkit is designed to support countries in implementing and applying the global minimum tax rules in a consistent and co-ordinated way. Further details are in our alert.
RCB 3 (2026): VAT treatment of public funds received by further education institutions
HMRC have published Revenue and Customs Brief 3 (2026) (RCB) on the VAT treatment of certain public funds received by further education institutions. The RCB sets out HMRC’s response to the Court of Appeal (CA) judgment in Colchester Institute Corporation. The RCB explains that, historically, HMRC took the view that amounts paid by government agencies to further education institutions to fund free education provided to eligible students were a grant, and outside the scope of VAT. However, in Colchester, the CA confirmed the Upper Tribunal (UT) decision that the funding was third-party consideration for the supply of education services to students. The RCB states that HMRC will not be appealing the CA judgment, which they will now consider further, in consultation with stakeholders. Any change in policy will be announced by way of a RCB and updated guidance.
Following the UT decision, HMRC gave further education institutions the option either to treat funding as third-party consideration or to continue treating education as a non-business activity. According to the RCB, for institutions that have continued to treat education as a non-business activity, any change to the VAT treatment will only apply from a future, yet-to-be-announced, date. Such institutions may continue to apply the relevant VAT zero- and reduced-rate reliefs, until the date of any change, and HMRC will not revisit prior periods. Institutions that adopted the third-party consideration approach should continue to do so. Such institutions should not have continued to apply the reliefs and also may be within the scope of the private school fees legislation.
EMEA Dbriefs webcasts
We have three Dbriefs tax webcasts over the next month: Off payroll workforce risk – Spring 2026 tax and legal updates (19 May 2026), Future-proofing your Global Workforce: The role of location strategy in talent attraction, development, and retention (20 May 2026) and Navigating the global shift to e-invoicing: preparing for the next 18 months (21 May 2026) Please visit our Dbriefs website for more information, and to view any other recent webcasts on demand.