Money Covered: The Week That Was – 20 February 2026

Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.

On the fifth episode of Season 4 of our podcast, Money Covered – The Month That Was, Mel is joined by David Allinson to discuss the FCA’s proposed section 404 consumer redress scheme for vehicle finance.

To listen to this and all previous episodes, please click here.

Our latest edition of the Financial Ombudsman Newsletter is out now and can be found here.

Headline development

FCA CEO signals move towards outcomes-based regulation

FCA chief executive Nikhil Rathi has described a shift in the regulator’s approach, with less emphasis on introducing new rules and more focus on using the Consumer Duty and supervisory tools to address market issues.

Speaking on the Fairer Finance podcast, Rathi said that not every problem can be resolved quickly through major interventions, additional rules, bans or guidance. He explained that the FCA is moving further towards an outcomes-based model, which he suggested could mean fewer new rules over time, with the Consumer Duty doing much of the work.

Rathi also discussed the FCA’s approach to enforcement and transparency. He noted that HM Treasury has previously expressed concerns about how clearly the regulator communicates its actions towards firms, and said the FCA is seeking to improve the way it provides updates through its enforcement communications.

His comments came in response to questions about the FCA’s use of Voluntary Requirements, which allow the regulator to secure changes from firms without a public enforcement outcome.

Rathi also suggested that issues around cross subsidies and distributional fairness in products such as credit cards and premium finance are not matters for the FCA to determine, indicating that these questions sit more appropriately with government and HM Treasury. He added that where certain products become more expensive for parts of society, that is ultimately a matter of social policy rather than something a regulator can directly resolve.

To read more, please click here.

Accountants

Statutory demands linked to disguised remuneration arrangements 

RPC has recently supported a number of clients who previously participated in arrangements involving Curzon Capital Limited. These structures involved payments being made through a trust and described as “loans”.

HMRC treats these payments as disguised remuneration, meaning income tax and National Insurance contributions may be payable. Many individuals have already reached settlement with HMRC on that basis.

Some former participants have since been contacted by a company claiming that the alleged loan debt has been assigned to it by the original trustees. Initially, the company sought payment in return for extending the loan period. More recently, individuals have received statutory demands seeking repayment of the alleged loans. HMRC has issued guidance for taxpayers who receive this type of correspondence.

A statutory demand is a serious legal document and must be dealt with within strict time limits. Failure to respond promptly can lead to significant consequences, including the risk of bankruptcy proceedings.

Anyone who has been involved in disguised remuneration or similar arrangements and has received contact from an unfamiliar company, or has been served with a statutory demand, should seek specialist legal advice immediately. In many cases, statutory demands can be challenged, but it is important that recipients take action and do not ignore them.

To read more, click here.

Investment platforms contacted by HMRC over unreported dividend income  

HMRC has requested information pertaining to dividend income from investment platforms, in a drive to close what HMRC refers to as the "tax gap" – being the difference between what tax HMRC is collecting and what it should be collecting.

HMRC is able to request this information under existing legislation, and whilst its focus had previously been on asking banks to report dividend income, that focus has now shifted to investment platforms.

Senior technical advisory manager of the Association of Chartered Accountants, Yogesh Dhanak, commented that there are many individuals who do their own tax returns and unwittingly under-report dividend income, or do not even realise they need to report it at all. Dhanak noted that the issue has been exacerbated following the recent decrease in the allowance from £2,000 to £500.

Dhanak further commented that, where an individual is found by HMRC to have under-reported dividend income, HMRC may send them a 'nudge letter' requesting that they resolve the issue, and that if this is done in a reasonable time, there will be no penalties.

Dhanak's comments also indicated that reporting dividend income may not always be straightforward, with there being nuances in terms of record keeping for accumulation funds and income funds. Dhanak went on to say that it would not be surprising to find some advisers may also have been getting this wrong.

To read more, please click here.

Auditors

FRC announces consultation on temporary tule change for Chinese-registered entities

The Financial Reporting Council (FRC) announced on 16 February a new consultation for a temporary rule change which would allow auditors of Chinese-registered entities to use Chinese Standards on Auditing for UK listing purposes.  

The consultation was announced in response to a request from the government to ease barriers which might discourage Chinese-registered entities from using the UK as a listing venue.  The proposed change is limited in scope and time, and would only be in place until some other legislative salutation can be implemented.

To read the consultation paper, click here.

Regulatory developments for FCA regulated entities

FOS issues fresh warning against APP and employment scams  

In a warning to consumers regarding scams, FOS confirmed that it received over 31,000 complaints in 2025 about scams, 20,000 of which involved payments from consumers authorised to scammers.

FOS noted that authorised push payment (APP) scams and employment scams in particular were prevalent, reminding consumers that online opportunities to earn money that seem too good to be true often are exactly that. Consumers are urged to listen to their banks when given fraud warnings and thoroughly research investment and employment opportunities to avoid becoming victims.  

To read FOS' warning, click here.

Upper Tribunal upholds FCA decision to ban adviser and DFM for recklessly exposing pension holders to unsuitable investments

On 18 February 2026, the Upper Tribunal upheld the Financial Conduct Authority's (FCA) decision to ban both Stephen Joseph Burdett and James Paul Goodchild from working in regulated financial services.

The FCA had banned them for recklessly exposing pension holders to unsuitable investments. Burdett had switched 232 personal pension funds worth over £10 million into unsuitable high-risk investment portfolios that had been created and managed by Goodchild. Burdett had also allowed these customers to receive reports indicating that their money was being placed in low or medium risk portfolios. To date the Financial Services Compensation Scheme has paid out over £1.4m to victims. 

The Tribunal had highlighted that the actions of these two showed "little regard for the interests of [his] clients" and that "as an experienced and qualified investment manager, Goodchild must have known the risk of putting pension holders of varying risk appetites into a high risk project." 

To read more, please click here.  

Case law updates

Court of Appeal finds expenses paid by an umbrella company were taxable

In Mainpay Ltd v HMRC [2025] EWCA Civ 1290, the Court of Appeal (CoA) confirmed that HMRC was entitled to recover PAYE on travel and subsistence payments that had been made free of income tax.

The case involved Mainpay Ltd (Mainpay) which was an umbrella company, and which employed and supplied temporary workers to agency companies. The issue for the CoA to consider was whether reimbursements for travel and subsistence expenses made by Mainpay under s338 Income Tax (Earnings and Pensions) Act 2003, were deductible for income tax and national insurance.

Mainpay's argument was that workers were employed under a single overarching continuous contract of employment, with each separate assignment being a temporary workplace. To the contrary, HMRC considered that each work assignment was a separate employment at a permanent workplace and therefore the travel and subsistence expenses were not deductible for income tax and national insurance purposes.

Mainpay's appeals to the First-tier Tribunal and the Upper Tribunal were unsuccessful, and so it appealed to the CoA. The CoA's conclusion was that there was no single overarching employment but rather successive employments, on the basis that there was intermittent employment, with no employment in the gaps between assignments and therefore, no single overarching employment. On that basis, the CoA determined that PAYE on the travel and subsistence payments was recoverable by HMRC.

The CoA further determined that Mainpay had acted carelessly by failing to take appropriate advice, as it had relied on assurances by lawyers as opposed to tax specialists. The CoA confirmed the approach adopted by the First-tier Tribunal – which was that a causal test should be applied – and on that basis, concluded that the loss of tax had arisen directly as a result of Mainpay's failure to take reasonable care. For the loss of tax determined to have been brought about carelessly, the 6-year time limit therefore applied. 

To read further from RPC's blog, please click here.

With thanks to this week's contributors: James Parsons, Alison Thomas, Daniel Goh, Heather Buttifant, Ben Simmonds, Kerone Thomas, Rebekah Bayliss