Tax Bites - July 2026

Welcome to the latest edition of RPC's Tax Bites – providing monthly bite-sized updates from the tax world.

News

HMRC updates its DOTAS Guidance

HMRC has updated its Guidance on the Disclosure of Tax Avoidance Schemes (DOTAS). 

A new section (Section 21A) has been added to explain the changes introduced from 18 March 2026, which allow HMRC to impose penalties without first applying to the First-tier Tribunal (Tax Chamber).

HMRC's updated Guidance can be viewed here.

HMRC publishes new Advance Tax Certainty manual

HMRC has published a new manual which provides guidance on the advance tax certainty service which came into effect on 1 July 2026.

The new manual can be viewed here.

HMRC publishes a new collection of guidance and documents relating to organised labour fraud

HMRC has produced a new collection of guidance, tools, and documents, designed to help temporary workers, recruitment agencies, umbrella companies and businesses that hire or work with them, better understand organised labour fraud.

The new collection can be viewed here.

OECD publishes a new Consultation on amendments to the Model Reporting Rules for Digital Platforms

The Organisation for Economic Cooperation and Development (OECD) has published a new Consultation entitled: "Proposed targeted amendments to the Model Reporting Rules for Digital Platforms to support exchange of tax information".

It has requested comments from interested parties by 14 August 2026.

The Consultation can be viewed here. 

Case reports

FTT allows appeal and finds that payments made by a charity were repayments of a loan

In Newpier Charity Ltd v HMRC [2026] UKFTT 00321 (TC), the First-tier Tribunal (FTT) considered whether payments made by Newpier Charity Ltd (Newpier) were repayments of a loan. It determined that they were and that they were not non-charitable expenditure, for the purposes of section 496(1)(d), Corporation Tax Act 2010. The FTT allowed the taxpayer's appeal and set aside HMRC's closure notices.

This decision is a timely reminder of the FTT's approach to evidence and confirms that the burden of proof (which is generally on the taxpayer) requires the taxpayer to provide evidence which establishes, on the balance of probabilities, its case. Newpier was not required to meet the high evidential threshold which had been argued for by HMRC in this case.

Businesses should ensure that accurate and comprehensive records are kept in relation to business transactions in order to evidence the approach taken in the event of an HMRC enquiry.

This decision also illustrates that lengthy HMRC enquiries can, in appropriate circumstances (such as in this instance), be brought to a timely conclusion by a taxpayer exercising its statutory right to apply to the FTT for a direction that HMRC issues a closure notice within a specified period of time.

You can read our commentary on the decision here.

FTT sets aside £2 million director's liability notice as an abuse of process

In Ashley Charles Trees v HMRC [2026] UKUT 92 (TCC), the Upper Tribunal (UT) allowed the taxpayer's appeal against a director's liability notice, finding that HMRC's conduct during earlier litigation resulted in material procedural unfairness to the taxpayer.

The UT confirmed in its decision that when HMRC alleges dishonesty, it must particularise its allegations properly at an early stage, particularly if it considers that proceedings for a criminal evasion penalty may follow. Failure to do so risks a ruling that those proceedings are unfair and an abuse of process.

You can read our commentary on the decision here.

UT considers disallowance of imported losses

In UK Care No 1 Ltd v HMRC [2026] UKUT 00090 (TCC), the UT allowed, in part, the taxpayer's appeal against HMRC's closure notice that disallowed an accounting loss of over £150m arising from a loan relationship.

This decision provides some helpful guidance on the application of the 'imported loss' restriction in section 327, Corporation Tax Act 2009 (CTA), and confirms that the concept of 'loss', in that section, has a broad meaning, which can include expenses within section 306A, CTA. 

The decision also confirms that different elements of loan notes may be treated differently, requiring a careful analysis of the contractual terms and surrounding facts of the loan notes. 

You can read our commentary on the decision here.

And finally …

Michelle Sloane has recently hosted another episode of RPC's ever popular Taxing Matters podcast. She was joined by Clive Brady, the Chairman of the Bonded Warehousekeepers Association, for a discussion of the new 'vaping duty'. You can listen to the episode here.