Money Covered: The Week That Was – 31 July 2026

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

The fifth episode of Season 4 of our podcast, Money Covered – The Month That Was, where the team looks at the Financial Conduct Authority's Vehicle Finance Redress Scheme Consultation, is now available.

See this and all previous episodes of RPC's Money Covered podcast.

Headline development

Financial Bill 2027: new duty for taxpayers to correct tax inaccuracies 

HMRC's draft legislation, published on 13 July 2026 for inclusion in the Finance Bill 2027, would introduce a new duty requiring taxpayers to correct inaccuracies in documents submitted to HMRC once they become aware of them. While the principle is straightforward, the proposed penalty consequences are significant.

If a taxpayer fails to take reasonable steps to correct a known error, the inaccuracy will be treated as deliberate for penalty and assessment purposes. This represents a substantial change from the current regime, where deliberate behaviour requires knowingly providing incorrect information. A finding of deliberate behaviour can result in HMRC assessing tax for up to 20 years and imposing substantially higher penalties.

The proposals would also give HMRC the power to issue a Customer Correction Notice, requiring taxpayers to correct a suspected inaccuracy or explain why no correction is needed. Taxpayers should therefore ensure they have robust processes for identifying, escalating and documenting potential errors, as well as clear procedures for deciding whether corrections should be made.

Read RPC's in-depth review on this.

Accountants and auditors 

FRC publishes Annual Enforcement Review 2026 

The UK's audit regulator, Financial Reporting Council (FRC) has published its Annual Enforcement Review 2026, summarising enforcement outcomes for the year ended 31 March 2026 and highlighting recurring themes in audit and corporate reporting.

The review reported an increase in enforcement activity during the financial year ending March. The FRC imposed financial sanctions totalling £18.2 million (reduced to £12.9 million after discounts), compared with £14.5 million in the previous year. The largest penalties included a £5.85 million fine against BDO LLP and two former audit partners for misconduct relating to the supervision of a dishonest senior manager, and a £3.3 million fine against PwC for serious deficiencies in its audit of Babcock International Group PLC.

The FRC issued 18 financial sanctions and 46 non-financial sanctions during the year, reflecting a notable increase in regulatory enforcement. Although total fines were lower than in 2024, this was largely because the previous year included the exceptional Carillion/KPMG case.

The FRC also confirmed that it will implement reforms to its enforcement regime, including greater transparency through the publication of certain cases and the introduction of more flexible enforcement options. The regulator stated that these changes are intended to deliver quicker outcomes, strengthen accountability, and improve the quality of financial reporting and audit across the UK.

Read FRC's Annual Enforcement Review.

Tax practitioners 

Upper Tribunal confirms position on HMRC SDLT repayment deadlines 

The Upper Tribunal has determined that repayment of Stamp Duty Land Tax (SDLT) by HMRC where a contract is rescinded/not carried into effect under the Finance Act 2023 (the Act) does not preclude a claim for SDLT overpayment relief where a taxpayer is out of time for claiming relief by amendment of the SDLT return. 

In the claim the taxpayer paid SDLT on the substantial performance of a contract for the assignment of the lease, but the contract was subsequently not carried into effect following its novation. The taxpayer sought repayment under two sections of the Act.

The first claim failed because the relevant section mandates that claims must be made by amendment of the SDLT return and they were out of time to make the amendment.  HMRC denied the overpayment relief claimed under the second section because the mandatory language precluded any other type of repayment claim - the First-tier Tribunal disagreed and allowed the taxpayers appeal.

The Upper Tribunal confirmed that the second section operates as a statutory remedy of last resort, which applies independently of other reliefs in the SDLT code. The requirement that repayment "must" be claimed by amendment of an SDLT return is procedural only and does not bar a taxpayer from making a separate claim under the second section.

The decision helpfully confirms that taxpayers who miss the 12 month period for amending an SDLT return following the failure of a substantially performed contract can still make an overpayment relief claim, subject to satisfying statutory time limits, restrictions and procedures.

See the decision in the case.

HMRC overseas tax information requests hit 5-year high

Overseas countries are targeting high net-worth individuals suspected of hiding assets in the UK.

A Freedom of Information request made by Lubbock Fine to HMRC showed that OECD countries made 1,553 requests for taxpayer information in 2025. This is an increase from 1,477 in 2024, 1,311 in 2023, and 1,198 in 2022. 

A director at Lubbock Fine has commented that the bulk of investigations targeted high-net-worth individuals who are current or former UK residents, or who are suspected of having hidden assets in the UK, through some form of complex investment vehicle.

He went on to comment that wealthy individuals holding assets through complex or unusual investment vehicles attract a lot of attention from foreign tax authorities. As more countries struggle to close the gap between their tax revenue and expenditure, they are expected to make more use of tax investigations.

Read more about UK HNWs under investigation by foreign tax authorities.

Regulatory developments for FCA regulated entities 

FCA releases findings into firms' approaches to monitoring consumer outcomes 

In a recent publication, the FCA has reviewed how firms monitor consumer outcomes under the Consumer Duty.

The FCA found that monitoring frameworks were often not clearly centred on customer outcomes or the risk of harm. In its review, the FCA observed that certain firms relied on high-level oversight without a robust structure to spot poor outcomes, diagnose root causes and trigger effective remediation.

The strongest approaches were described as structured and evidence-led, where firms define what “good outcomes” mean across the customer journey, translate these into measurable indicators, and can demonstrate a clear link between management information, decisions, actions and tested improvements, including proportionate approaches for smaller firms.

By contrast, the FCA noted that some firms still depend on reactive or ill-defined indicators, lack of clear audit trails, and cannot show how management information is used to detect emerging issues or assess whether outcomes are improving. Firms are expected to explain why particular metrics and tolerances were selected and to test whether interventions actually reduce harm.

The FCA also expects firms to strengthen oversight of third parties and distribution chains by obtaining relevant information on customer outcomes, and to ensure boards and senior leaders provide meaningful challenge and decision-making rather than simply reviewing reports.

See the FCA press release and the full publication.

Relevant case law updates

Judicial Review against FOS successful in time bar challenge

In R (on the application of Barclays Bank UK Plc and others) v Financial Ombudsman Service Ltd [2026] EWHC 1555 (Admin), the High Court has allowed judicial review applications regarding jurisdiction made by four banks against the Financial Ombudsman Service (the FOS). 

Barclays Bank UK plc, National Westminster Bank plc, Vanquis Bank Limited, and Santander UK plc (the Banks) challenged FOS decisions that it had jurisdiction to consider consumer complaints about credit relationships under section 140A of the Consumer Credit Act 1974 which occurred more than six years before complaints were made. Interestingly, the FCA acted as an intervener opposing the FOS' position, which "marks a novel legal departure", being the first known instance where this has happened.

The FOS relied on a "corrective responsibility" concept taken from Plevin v Paragon Personal Finance Limited and Smith v Royal Bank of Scotland plc. It argued that there is a responsibility on lenders to correct unfairness caused during the relationship, and each failure to do so constituted a new event complained of under DISP 2.8.2 R, with time only running from the end of the credit relationship. The Court rejected this argument, finding that the Supreme Court's decision in Smith (which drew on Plevin) related to the Limitation Act 1980, and not to the time limits under DISP. The Court also found that "corrective responsibility" does not exist.

The FOS also attempted to argue that one act done by the Banks in time opened up the FOS' jurisdiction over the entire credit relationship. This was dismissed by the Court – while the discretion given to FOS under the Financial Services and Markets Act 2000 to award redress is beyond that which a court may provide, the FOS' powers do not extend to bringing acts otherwise out of time within its jurisdiction. Redress must relate to admissible acts or omissions that took place within six years of the consumer's complaint.

The decision provides clarity on the scope of the FOS's jurisdiction when it comes to considering complaints relating to acts and omissions which took place over six years from the date of the complaint, and that there is no concept of "corrective responsibility".

Read the decision.

With thanks to this week's contributors: Lauren Butler, Haiying Li, Damien O'Malley, Daniel Parkin, Dorian Nunzek and Brendan Marrinan.

If you have any queries please do get in contact with a member of the team, or your usual RPC contact.