13 June 2025
Pillar Two global minimum top-up taxes registration deadline in the UK – reminder
As a reminder, registration with HMRC is required for groups within the scope of Pillar Two in the UK within six months of the end of the group’s first in-scope accounting period – i.e. by 30 June 2025 for December year-end groups. See Tax@Hand for further details. Deloitte’s Global Pillar Two Legislative Tracker can help you to stay informed about local measures implementing Pillar Two. The Tracker provides a high-level summary of Pillar Two proposals and enacted laws by jurisdiction, together with country-by-country comparisons.
Government publishes update on UK taxation of carried interest
HM Treasury has published an outcome document titled The Tax Treatment of Carried Interest - Government Response and Policy Update, following its October 2024 call for evidence on potential new qualifying conditions for the revised carried interest tax regime. The main announcements include that the government has decided not to proceed with implementing a minimum level of team co-investment, or a minimum holding period for carried interest. In addition, the Income Based Carried Interest (IBCI) rules will be modified. Measures will also be introduced which are expected to make the new rules more workable for many short-term visitors to the UK. The government plans to release draft legislation for technical consultation before the Summer Recess in late July, with legislation for the revised regime to be brought forward in the next Finance Bill. Please see our Alert for further details.
HM Treasury publishes Tax Policy Making Principles
On 12 June 2025, HM Treasury published a document titled Tax Policy Making Principles, which sets out the principles that “underpin the government’s approach to delivering tax policy changes through the single major fiscal event cycle, and how it will engage with stakeholders during tax policy development.” The first principle is predictability and sustainability and includes the government’s commitment to a single annual major fiscal event. Where possible, the government will indicate “a clear direction of travel for the tax system”, such as through the Corporate Tax Roadmap. The government will take a “smart and agile approach” to consultation, such as by taking a more flexible approach to the timing of publishing supporting documents and prioritising frequent engagement with tax professionals. Finally, the government will ensure that tax policy making is “open and transparent” and will explore options for the creation of a dedicated resource to track technical tax announcements.
HMRC update guidance on loan relationship unallowable purpose rule
HMRC have updated their guidance, contained within pages CFM38100 to CFM38200 of the Corporate Finance Manual, on the loan relationships for unallowable purposes rule (sections 441 and 442 Corporation Tax Act 2009). If it applies, the unallowable purpose rule can deny corporation tax relief for debits, such as interest expenses, arising on a loan relationship. The updates to the pages include HMRC’s summaries of recent relevant case law, including key unallowable purpose rule Court of Appeal judgments handed down in 2024. It also includes HMRC’s views on how debits could be attributed to an unallowable purpose under the rule’s ‘just and reasonable apportionment’ requirement.
Updated HMRC guidance on repayment interest
HMRC have updated their International Manual (INTM333520) to reflect that from 1 July 2025, EU and EEA resident companies will no longer be entitled to ‘repayment interest’ in relation to a repayment of income tax where a company makes a claim for relief under a Double Tax Agreement with the UK. Companies that are within the charge to UK corporation tax in respect of the underlying income will continue to be entitled to receive repayment interest.
Supreme Court permission to appeal updates – BlueCrest and Refinitiv
The Supreme Court’s website has been updated to indicate that the taxpayer has been granted permission to appeal in the ‘salaried members’ legislation case BlueCrest Capital Management (UK) LLP. The Court’s website has also been updated to indicate that permission to appeal the Court of Appeal decision in the judicial review case R (oao Refinitiv Limited and others), which concerned the lawfulness of Diverted Profits Tax (DPT) notices, has been refused.
Advisory fuel rates
HMRC have published the new advisory fuel rates for company cars applicable from 1 June 2025. The previous mileage rates, effective from 1 March 2025, can be used for up to one month from the date the new rates apply. The rates for petrol engines sized 1401cc to 2000cc and over 2000cc, and for diesel engines sized 1600cc or less, have all decreased by 1 pence per mile. Rates for all other petrol and diesel engine sizes, liquefied petroleum gas (LPG) engine rates, and the advisory rate for fully-electric cars, are unchanged from the previous quarter.
OECD Inclusive Framework publishes updated consolidated version of Pillar Two commentary
The OECD/G20 Inclusive Framework has published an updated consolidated commentary to the Pillar Two model global minimum tax rules. The previous version of the Pillar Two commentary, released in April 2024, has been updated for administrative and other guidance approved and published by the Inclusive Framework up to the end of March 2025, including the Agreed Administrative Guidance on Pillar Two published in June 2024 and January 2025. Please see Deloitte Tax@Hand for more details.
VAT late payment penalties – regulations
As announced in the Spring Statement 2025, the Finance Act 2021 (Increase in Schedule 26 Penalty Percentages) Regulations 2025 have been made to increase late payment penalties for VAT taxpayers (and income tax self-assessment taxpayers as they join Making Tax Digital). The new rates are 3% (from 2%) of the tax outstanding where tax is overdue by 15 days, plus 3% (from 2%) where tax is overdue by 30 days, plus 10% (from 4%) per annum where tax is overdue by 31 days or more. The regulations came into force on 31 May 2025. (Contact: Andrew Clarke)
EMEA Dbriefs tax webcasts
We have four Dbriefs tax webcasts over the next month: Addressing the tax impacts of sustainability in the supply chain (19 June 2025); Update on consultations on transfer pricing, permanent establishments and diverted profits tax (1 July 2025); UK tax update - July (8 July 2025); and Business leadership insights to deliver global talent agility (10 July 2025). Please visit our Dbriefs website for more information, and to view any other recent webcasts on demand.