Other news in brief

As mentioned in the last edition of Tax Matters Digest, just before the 30 June 2026 deadline, HMRC confirmed that under their 'transitional approach', they will not be charging late filing penalties if Pillar Two returns are submitted by 31 July 2026. This includes GloBE Information Returns (GIR), Domestic Top-up Tax and Multinational Top-up Tax returns, and Overseas Return Notifications. There have since been further updates to HMRC’s guidance in relation to the GIR only, saying that where HMRC notify the group that there are errors in their submitted return, if those errors are fixed and the return is re-submitted by a certain date then HMRC will use the date they received the first information return as the submission date. The guidance initially stated that the re-submission also had to be by 31 July 2026, but HMRC have now extended this to 1 September 2026. If you would like to discuss any aspects of Pillar Two compliance, please contact Craig Barrowman at KPMG in the UK.

The Finance Act 2026 (Registration of Tax Advisers) (Appointed Days and Transitional Provision) Regulations 2026 were published on 14 July 2026 and confirm the long-awaited timetable for the new tax agent registration regime (covered in our earlier article which highlighted its wide scope). The regulations confirm that all affected entities that have an HMRC ‘Agent Services Account’ (ASA) immediately before 18 August 2026 will be treated as if they are registered from that date. For those without an ASA, the deadline depends upon which tranche the entity falls into:

• Tranche 1: Any entities which are not in one of the other tranches must register before 18 August 2026;
• Tranche 2: Any entities which have a specified type of (non-ASA) HMRC online services account (and do not fall within tranche 3 or 4) must register before 18 November 2026;
• Tranche 3: Any entities which solely provide payroll services (and do not fall within Tranche 4) must register before 18 February 2027; and
• Tranche 4: Any entities which fall into the ‘Financial Services’ delay (which applies to certain groups carrying out regulated activities) must register before 1 April 2027.

Then on 16 July 2026, HMRC provided further guidance in their ‘Agent Update issue 145’. Of most note was the section on ‘complex organisational structures’ where HMRC set out certain structures that they intend to be out of scope of the new requirements, including joint ventures, trusts/trustee relationships and special purpose vehicles (SPVs). HMRC also provide welcome confirmation that “Businesses relying on HMRC guidance in good faith to decide that they do not need to register will be treated as compliant, with no sanctions or penalties, even if HMRC later clarifies that the business should register.” Organisations will need to keep a look out for the publication of future legislation to exempt these cases by adding them to Schedule 20, Finance Act 2026. There remain a number of issues and uncertainties around the practical application of the rules. Please speak to your usual KPMG in the UK contact if you are uncertain if you fall within the new regime or wish to discuss how it might apply to you.

On 9 July 2026, HMRC published their annual report and accounts for the year ended 31 March 2026. The accounts show total tax revenue collected of £966.4 billion (an increase of £90.4 billion on the previous year) with over £50 billion of compliance yield for the first time. Alongside this was published the Charter Stakeholder Group report for 2025 to 2026. The HMRC Charter sets out the relationship between HMRC and taxpayers, what taxpayers can expect from HMRC and the behaviours HMRC expect of them. This report acknowledges that “HMRC’s performance against key charter standards remains a concern, especially on responsiveness, getting things right and making things easy”. Also published on the same day were three of HMRC’s most important annual research studies: the Large Business Customer Survey 2025; the Agents, Small and Mid-sized Business Customer Survey 2025; and the Individuals Customer Experience and Perceptions Survey 2025.

HMRC have recently changed their guidance in the Corporate Intangibles Research and Development manual (CIRD260160) for Patent Box claimants subject to transfer pricing adjustments. The existing legislative framework provides an exemption from the transfer pricing provisions for Small and Medium sized Enterprises (SMEs). However, HMRC may switch off the exemption (via the issue of a notice to the taxpayer) for medium sized enterprises under s168 TIOPA 2010 and for small enterprises that are Patent Box claimants based on s167A TIOPA 2010. HMRC may opt to do this because profits diverted to a Patent Box claimant may benefit from a reduced effective tax rate of 10 percent compared with the usual main rate of 25 percent. The new guidance makes it clear that HMRC’s expectations are that a Patent Box claimant that has been required to make a transfer pricing adjustment that impacts the Patent Box profits must redo the entire Patent Box calculation to reflect the transfer pricing adjustments. This was implicit in previous guidance but has now been made expressly clear in the new wording.

On 16 July 2026, HMRC opened a technical consultation into proposed changes to some definitions used in the bank levy legislation. These changes are broadly intended to maintain alignment with the corresponding regulatory rules and are not expected to have any exchequer impact. The consultation runs until 13 August 2026.

On 20 July 2026, HMRC published draft regulations and other materials in relation to proposals aimed at improving the quality and consistency of the data HMRC receive on interest income (consisting of bank and building society interest and interest from other sources) and card sales (data shared by providers of card acquiring services, such as merchant acquirers). HMRC are hoping this will improve their ability to match third party data to taxpayer records, supporting digital prompts and nudges, and improving compliance through better targeted interventions. The proposals will be of most interest to the financial institutions who provide the data in question – with particular focus on the obligations to collect National Insurance Numbers (NINOs) from new and pre-existing customers for bank accounts, and Company Registration Numbers or VAT Registration numbers for payment reporting. The consultation is open until 20 August 2026.

HMRC have opened a technical consultation on the draft Individual Savings Account (Amendment) Regulations 2026 which contain the expected changes to the Cash ISA limit, reducing it to £12,000 per annum for under 65s. Also included are expected anti-avoidance rules which prevent the use of Stocks & Shares ISAs to shelter cash. The consultation on the draft regulations runs until 2 August 2026.

HMRC have published the summary of responses to the consultation titled “Simplifying the Taxation of Offshore Interest”, originally published on 30 October 2024. The consultation asked for views on changing the rules on the taxation of offshore interest, so that the interest arising in the calendar year would be treated as coterminous with the UK tax year. The summary of responses states that most respondents agreed with the issues and timing mismatch set out in the consultation document, however, there was no consensus on how to deal with this. No formal proposals are being made following the consultation, and HMRC will continue to consider the suggestions mentioned.